West Bengal has alleged that the Centre and the Reserve Bank of India have tied the hands of the bankers from lending to the micro-enterprises in the state as borrowers are now required to submit their Permanent Account Numbers (PANs), leading to massive loan application rejections.
“In a recent meeting of the state-level bankers’ committee, which I mentor, it became evident that the cause of such huge rejections by the banks was the stringent notification by the Government of India which made mandatory a variety of requirements, including PAN card etc. for even these micro weavers and artisans,” Amit Mitra, Principal Chief Advisor to West Bengal chief minister, wrote to union finance minister Nirmala Sitharaman. “Unfortunately, RBI too has brought out a similar stringent notification.”
In West Bengal alone, out of 15,298 weavers who applied for loan, as many as 10,108 faced rejection by banks – a staggering 66% rejection rate, between April-September 2022, Mitra said. Similarly, out of 48,153 applications for loans, from the artisans of the state, 29,656 applications or 62% were rejected by banks.
He said the rejections were although the loan applications of weavers and artisans were vetted by the District Industries Centres (DICs) as per the requirement by the banks. Furthermore, all of the weavers were holders of Weaver’s Credit Cards, as well.
“Therefore, I humbly urge you to persuade both the RBI and MSME Department of the Government of India to rectify the notifications and allow self certification by micro weavers and artisans for bank loan applications, as was the case in the initial Notification,” Mitra said. If weavers and artisans of West Bengal alone have faced 40,000 rejections of bank loans, the number of such rejections, could well be to the tune of 0.5 to 1 million in the country as a whole, he added.
Such stringent notifications are divorced from the ground reality of mini – micro-enterprises in the country which is simply crying out for ‘financial inclusion’ to grow their enterprises & livelihoods. The Chief Secretary of West Bengal, flagged this issue a few days ago in the presence of the Prime Minister in Delhi at the chief secretaries conference.