Orissa banks restructure 62,799 MSME accounts

The banks operating in Orissa restructured 62,799 loan accounts of micro, small and medium enterprises (MSMEs) during 2008-09 with a view to help them tide over the difficulties arising out of economic slow down.

This includes 51,172 accounts of new working capital loans and 11,635 working capital loans of the existing units. The total amount involved in these cases were Rs 2487.41 crore, says Hemant Sharma, director industries, Orissa government.

Participating in the deliberations of the special monthly State Level Bankers' Committee (SLBC) meeting, Sharma said, 3541 accounts involving Rs 250.42 crore working capital loans were restructured in March this year. Besides, 418 existing accounts involving an amount of Rs 102.87 crore were also recast during the same month.

Stating that the credit flow to the MSME sector of the state in April this year was dismal, he said, the credit to this sector didn't take off in the month with the total sanctions languishing at Rs 50.62 crore. Out of this, the public sector banks extended loans of about Rs 42.23 crore. In this backdrop, the banks were urged to increase the credit flow to the MSME sector.

On credit linked subsidy scheme (CLCSS), the MSME Development Institute, Cuttack had made a request to the nodal banks for furnishing the information on CLCSS in a pre-designed pro-forma. The nodal banks were advised to furnish the required information scrupulously after sanction or release of subsidy under the scheme.

Similarly, the banks were advised to extend collateral free loans to MSME units in the state under the Credit Guarantee Trust for Small and Micro Enterprises (CGTSME).

The industry associations representing the micro, small and medium enterprises have been complaining about the reluctance of the banks to sanction loans under CGTSME scheme.

It may be noted, in the 109th meeting of the SLBC held about two years back, it was decided that all banks should associate themselves in financing of the projects of ex-EDP (entrepreneurship development programme) trainees of MSMEDI, Cuttack. Since in most of the cases the banks are not doing so, they were advised to take steps to extend credit to the ex-EDP trainees.

On the issue of the banks returning proposals stating that the units are not coming within their service area, it was decided that they should go for inter-bank transfer of targets. A bank will transfer the application of the unit to a branch under the service area of which the unit is located. The Lead District Managers (LDMs) will monitor such cases.

This apart, the banks were asked to expedite disbursement of credit to the units which were sanctioned up to 31 March 2009, as the utilisation of margin money and the disbursement period has been extended up to 30 June 2009 by the Khadi and Village Industries Commission (KVIC).

Kaza Sudhakar, regional director, Reserve Bank Of India (RBI), Panchanan Dash, additional secretary, industry department of Orissa government and S M Sinha, general manager, Uco Bank were present.