A day after the government asking the PSU banks to cut interest rates further, the Reserve Bank will convene a meeting on Tuesday to firm up measures to inject liquidity into medium and small scale units and help them stem the impact of global downturn.
Officials of the Ministry of Micro, Small and Medium Enterprises, representatives of the small scale units and bankers would part take in the meeting taking place in Mumbai, to resolve the liquidity crisis for the small scale sector.
The issue of interest rates along with adequate finance would come up for discussion.
"Banks have not taken adequate steps to provide credit to the sector, as was announced by the government under the two stimulus packages," Federation of Indian Micro and Small and Medium Enterprises (FISME) Secretary General Anil Bhardwaj said.
Bhardwaj, who would be attending the meeting said, FISME would insist that 15 per cent of the priority sector lending be left exclusively for the small units.
External Affairs Minister Pranab Mukherjee, who is also holding the charge of finance portfolio today convened a meeting of the bank heads for boosting credit flow to the industry.
"As deposit rates have moderated, there is general expectation that interest rates will come down," Finance Secretary Arun Ramanathan said after the meeting with the PSU bankers.
In the January 2 package, the government had enhanced the guarantee cover on loans to the small units.
The government had also asked the state level bankers' committees to ensure that the sector which provides employment to 40 million people is given adequate finance.
The MSMEs account for 45 per cent of the country's factory output and nearly 40 per cent of exports.
Courtesy: The Hindu (February 2, 2009)
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