The State Level Bankers’ Committee (SLBC) has directed banks not to ask for collateral security in case of loans up to Rs 10 lakh extended to MSME units, including those financed under the PMEGP programme.
The direction came at a SLBC Sub-Committee meeting of the MSME and Skill Development Department here on Wednesday held under the chairmanship of the department’s Secretary LN Gupta.
The meeting reiterated that as per the Master Direction of the RBI on lending to the MSME sector dated January 21, 2016, banks may on the basis of good track record and financial position of the MSME units increase the limit to dispense with the collateral requirement for loans up to Rs 25 lakh.
Banks were further told to follow the guidelines of the Government of India not to insist upon collateral security for the loans up to Rs 2 crore covered under the Credit Guarantee Trust Fund for Micro and Small Enterprises (CGTMSE).
From the review, it emerged that during the current fiscal up to January 15, as many as 1,709 units have been disbursed with margin money (subsidy) of Rs 38.89 crore under the PMEGP. The Sub-Committee advised the banks to expedite disbursement of assistance in respect of the already-sanctioned cases and decide the pending applications latest by February 15, 2018. Further, the banks were requested to advise each of their branches to consider sanction of at least three to 5 five PMEGP cases with a view to maximising achievement under the programme.
The Sub-Committee also reviewed the progress of declaration of MSME-specialised branches by different banks. So far, 230 bank branches have been declared MSME-specialised branches for the purpose of giving advance to MSMEs. The banks, which are yet to declare MSME-specialised branches for all the districts, were asked to do so by January 31.
As regards MUDRA, the SLBC Convenor informed the Sub-Committee that loans of Rs 7,436 crore have been disbursed to 25.24 lakh beneficiaries during the current fiscal till date. The Sub-Committee asked the banks to sanction more loans under the Kishore and Tarun categories.
The Sub-Committee also asked the bankers to regularly hold meetings of the stress committees to consider the cases of potentially-viable sick units for their revival and rehabilitation instead of resorting to loan recovery.
It was found that only 13 banks have conducted stress committee meetings. The remaining banks were asked to hold stress committee meetings early. The banks were advised to proactively finance clusters, startups and ventures promoted by skilled youth.