TIRUCHI
Micro Small and Medium Enterprises (MSMEs) in the region are disappointed over what they perceive as the delay in utilisation of the ₹ 20,000 crore subordinate debt promised for stressed MSME units by the Central Government as part of COVID 19 package for revival of the sector.
Not all banks have taken initiatives to transfer the benefit of the initiative to the deserving units.
In Tiruchi region, State Bank of India has taken the lead in disbursing funds to the struggling MSME units.
“The SBI has disbursed about ₹102 crore to around 250 units. We appreciate the speedy disbursal during the crucial period and expect other banks to follow suit,” Rajappa Rajkumar, president of BHEL Small Industries Association, said.
“MSME sector in the region that been going through a phase of recession over the last four was facing extreme hardship due to the COVID 19 pandemic and are facing difficulties in meeting out the salary and other critical commitments. Though the Central Government and Reserve Bank of India had announced special packages through the Banks, there is a delay in percolation of the directive,” Mr. Rajappa Rajkumar said.
Referring to the Emergency Credit Line Guarantee (ECLG) Scheme for availing the utility of the Government's ₹ 3-lakh crore collateral-free loan, the president of Tiruchi District Tiny and Small Scale Industries Association R. Ilango questioned the insistence by banks on Memorandum of Deposit of Title Deed (MODT), despite the scheme providing 100% guarantee coverage for 20% additional working capital term loans through the National Credit Guarantee Trustee Company Limited.
“In these difficult times of financial stress, the insistence of bank on MODT will cause additional burden. The RBI has to given clear instructions to the banks not to ask for additional MODT from the MSME units,” Mr. Ilango said.
Otherwise, the State Government has to exempt stamp duty on MODT for the ELGC scheme, he said.