Published On : Fri, Feb 14th, 2020

COSIA submits Memorandum on MSME issues to FIDD- RBI.


Shri Mayank Shukla & CA Julfesh Shah on behalf of Chamber of Small Industry Associations, Vidarbha (COSIA) submitted a memorandum highlighting certain important financial issues relating to MSME in anticipation of an appropriate action to ease out the financial problems to the officials of FIDD-Reserve Bank of India (RBI),Nagpur at a Town meeting for MSME issues organized by RBI to observe Financial Literacy week.Shri Mayank Shukla, Chairman,COSIA Vidarbha while adressing the issues said that sorting out of the issues will help the MSME sector in capacity building & will encourage them to carry out their activities smoothly & efficiently.

The memorandum highlighted about the issue regarding MSME industries needing financial support to the extent of 2 crores are supposed to get them without any collateral security under CGST scheme, but surprisingly many of the banks refuse to lend financial support under this scheme and ask MSME borrowers to furnish appropriate securities against lending financial loan which becomes difficult for MSMEs.

Also it addressed the issue about the MSMEs industries needing “Bank Guarantees” as securities during business transactions are also financially supported by the bankers. In many of the cases while dealing with Government PSUs or Corporate Sectors, when these bank guaranties expire and there is no claim against such bank guarantees, they are not returned immediately and some times there is an inordinate delay in returning the original copy of bank guarantee. As such expired bank guarantees has no importance after the validity period it should be treated as ineffective and returned back on execution of Indemnity Bond furnished by the beneficiary MSME industry.

The memorandum further pointed out that Government has reduced Repo Rates gradually from 8% in 2014 to 5.15% till date to boost industrial growth in the country but bankers have passed on only a part of this reduction to the lenders it requested the apex bank to ensure that the reduction and Repo Rates are substantially passed on to the Industrial Borrowers.Also the reverse Repo Rates are stagnant since October 2019, yet the banks are gradually reducing their interest rates on Fixed Deposits to increase their profits or adjust their earlier accumulated losses.

This practiced should be stopped to protect the interest of depositors and in particulars of senior citizens who are solely dependent on this source of income only. Mr Suresh Satpute,General Manager,FIDD- RBI,Nagpur noted the issues & assured to take up the matter at appropriate level.Mr.Brijeshkumar Singh,Asst.General Manager,FIDD-RBI ,Mr Umesh Bhansali,Manager,FIDD-RBI,Mr.Anupam Singh,Manager,FIDD-RBI,CA Julfesh Shah,Mr.Sunil Sirsikar,Mr.Udayan Shrouti,Mr.R.K.Chokhani,Mr.Nischay Shells,Mr Punit Mahajan,CA.Nitin Alshi were prominently present in the meeting.