Finance ministry asks banks to open MSME intensive branches1 min read . Updated: 17 Dec 2017, 01:44 PM IST
MSMEs, which are a huge employment generator in the country, contribute 40% of the India's manufacturing
New Delhi: In order to increase credit availability to small businesses, the finance ministry has asked public sector banks to open micro, small and medium enterprises (MSME) intensive branches.
MSMEs, which are a huge employment generator in the country, contribute 40% of the India’s manufacturing. To cater to the segment, banks have been advised to open specialised branches with skilled manpower to handle the requirement of employment intensive MSME sector, People aware of the development said.
The decision to this respect was taken in the ‘PSB Manthan’ organised by the finance ministry last month. Besides, they were also advised to strengthen cluster based lending, people aware of the news said, adding that branches would help in channelising loans to the sector which is engine of growth.
As many as 50 clusters have been identified for enhanced access to financing, people added. Small Industries Development Bank of India has revamped udyamimitra.in portal, so that banks compete for financing MSME projects.
It is to be noted that finance minister Arun Jaitley in October had announced an unprecedented Rs2.11 lakh crore plan to strengthen public sector banks that are reeling under high non-performing assets (NPAs) or bad loans.
The capital infusion, Jaitley had said, will be accompanied by reforms to enable the state-owned banks to play major role in the financial system and give a strong push to the job-creating MSME sector. NPAs of PSBs rose to Rs7.33 lakh crore as of June 2017, from Rs2.75 lakh crore in March 2015.