Mumbai, Apr 10 (KNN)The Reserve Bank of India’s (RBI’s) Deputy Governor SS Mundra has said that the micro, small and medium enterprises (MSME) sector is not getting the kind of attention it needs by the banks.
Recently, Mundra, who was speaking at the 13th convocation of the Pune-based National Institute of Bank Management (NIBM) said “At RBI we continue to feel somewhat dismayed that the sector is not getting the kind of attention that it needs to get, particularly, in helping them to deal with the period of strain which always come in the life of enterprises.”
Holding banks responsible for the large number of ‘sick’ MSMEs, Mundra also said the banks have not paid enough attention to this sector.
Mundra said last year the RBI had come up with guidelines for banks to have committees in every district where these enterprises could go to put up their cases. This he said followed the legislations brought forth by the Government of India last year for rejuvenation of the sector.
“It is really upsetting to see some of them are not even aware of the legislation. Some who are aware have not put up the set up,” he said.
Mundra acknowledged that the sector has the potential for growth and bankers should help them. Banks have not used the tools to help the sector in terms of automatic enhancement of term loans, he said.
He stressed that another area of concern especially in case of public sector banks is asset quality in the banking system.