Bengal’s ex-minister urges FM Sitharaman to ease loan access norms for weavers

Former West Bengal Finance Minister Amit Mitra on Monday has pointed out that some 40,000 weavers and artisans of the state have denied loans due to stringent notifications brought out by the central government and the Reserve Bank of India (RBI). 

He has written a letter to Union Finance Minister Nirmala Sitharaman at a time when Kolkata is hosting a G20 summit on financial inclusion, according to the news agency PTI. 

In the letter, Mitra said, “You would be shocked to know that there is a staggering 66 per cent rejection rate for weavers ... and 62 per cent for artisans. These artisans had gone through District Investment Centre's and held Artisan's Credit cards.”

Mitra, now designated Principal Chief Adviser to West Bengal CM, has sought allowing self-certification instead of requirements of submitting PAN for these impoverished micro- entrepreneurs, whose income was far below taxable limits.

Citing a recent meeting of State level bankers' committee which he mentored, the Principal Chief Advisor said it became evident that "the cause of such huge rejection by banks was stringent notifications by the government making mandatory a variety of requirements including PAN cards, etc.."

The former West Bengal finance minister who is also a well known economist, also stated that these notifications have tied the hands of the bankers from granting these micro-loans and led to massive rejections of otherwise prudent lending, as per PTI reports. 

"This is even more pertinent at a time when G20 is been held under India's presidency. You are aware the G20 nations, have made financial inclusion of SMES and micro enterprises as their focus area in the global action plan," he said in the letter. 

"Your urgent intervention is critical for 'financial inclusion'” of the entrepreneurs from the bottom of the pyramid. I humbly urge you to persuade both RBI and MSME department of GOI to rectify the notifications and allow self certification is by Mike weavers and artisans for bank loan applications, as was the case in the initial notification," Mitra added. 

(With PTI inputs)