FM Sitharaman says banks can’t refuse loans to MSMEs under emergency credit facility; warns action if reported

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Updated: July 31, 2020 3:16 PM

Credit and Finance for MSMEs: Nirmala Sitharaman said that if banks refuse credit to MSME under the emergency credit facility, it must be reported and she will look into it.

Finance Minister, Nirmala Sitharaman, bank credit, MSME credit, credit for small business, development finance institutionNirmala Sitharaman said that reciprocity is a very critical point in India’s trade negotiations.

Credit and Finance for MSMEs: Finance Minister Nirmala Sitharaman today said that banks cannot refuse credit to MSMEs covered under the emergency credit facility. Nirmala Sitharaman added that if the banks refuse such credit, it must be reported and she will look into it. Speaking at FICCI’s National Executive Committee Meeting, she further said that every step which is being announced and taken to deal with the current situation is being done after exhaustive consultation with the stakeholders and industry experts. FM Sitharaman also assured that the focus is on restructuring and the  Finance Ministry is actively engaged with RBI on this. 

Addressing the concerns of the hospitality sector which is severely hit due to the coronavirus pandemic, she said that the government fully understands the sector’s requirements on the moratorium extension or restructuring and it is working with the RBI on this. On the infrastructure front, the FM underlined that the work is going on the Development finance institution, however, what shape it will take will be known shortly.  

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As international trade faces headwinds from the global lockdown and other restrictions, the minister said that reciprocal arrangements are being asked with the countries with which India has opened up its markets. She added that reciprocity is a very critical point in India’s trade negotiations.

Meanwhile, earlier this week, FM Sitharaman had said that the government is working on completing the stake sale process of about 23 PSU companies whose divestment has already been cleared by the Cabinet. She had also assured that she would soon meet small finance firms and non-banking finance companies (NBFCs) to review the credit being extended by them to businesses. Encouraging the Atma Nirbhar Bharat mission and highlighting the government’s step to open up all sectors for private firms, Nirmala Sitharaman had said that the final call as to which are the strategic sectors is not made yet. 

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