Industry bodies want banks to follow Nair panel recommendations

CCIA also called for revision of criteria for NPAs

The Co-ordination Committee of Industries Associations (CCIA), Odisha, an umbrella organisation of various industry associations in the state, has appealed before the Parliamentary standing committee on commerce that bankers are not adhering to the recommendations of the TKA Nair Committee.

"Commercial banks in general are not adhering to this guidelines (TKA Nair committee recommendations) in letter and spirit. Suitable monitoring and enforcement procedures should be installed and reviews be done on quarterly basis by the RBI," CCAI said in a memorandum to the Parliamentary panel.

As per the recommendation of TKA Nair committee, 20 per cent of the total advances should go to MSME sector. Out of this chunk, 60 per cent should go to the micro enterprises and bankers should target 10 per cent annual growth in the accounts of micro enterprises.
 

"But unfortunately, it is observed that the target of 20 per cent is yet to be achieved and most of the bankers are sanctioning finance for renewal cases and very few new accounts are being financed as per the guideline," the memorandum read.

It recommended to the Parliamentary panel, which is studying the relevance of 'Industrial Policy in the Changed Global Scenario', to ensure that units availing one time settlement should not be debarred from any assistance by banks and financial institutions.

The CCIA also called for revision of criteria for Non- performing Assets (NPAs) with regard to MSME units and proposed that MSME accounts may be declared as NPA only on default of interest payment for a period of 180 days and principal repayment default for 360 days.

The umbrella organisation urged the visiting panel to take necessary steps to declare Bhubaneswar airport as an international airport, start containerisation facility at Paradeep port, form clusters for sector specific MSMEs under various schemes of the Centre, provide last mile linkage to MSME sectors like fishery, agri-clusters and establishment of cold chain from farm sites to export gate ways, among others.

The Parliamentary standing committee interacted with the industry bodies on Sunday.