New Delhi: The government today warned private and foreign banks of tough action if they do not improve on lending to micro, small and medium enterprises (MSME), which are reeling under the impact of global downturn.
“If they don’t comply with RBI direction, at some point of time, the government will be forced to act,” said commerce secretary G.K. Pillai on the sidelines of a seminar organised by the Federation of Indian Micro and Small & Medium Enterprises here.
“I have no hesitation in saying it...they (private sector banks) have been fair-weather friends, unlike the public sector banks,” he said.
Pillai, who was in the Committee of Secretaries involved in the preparation of two stimulus packages, said private banks were courteous and customer-friendly in good times.
However, “when the going gets tough, they are literally abandoning the small, medium and micro enterprises”, Pillai said, adding, the government was taking up the issue with the Indian and foreign banks.