J&K top officer heading Industries sector criticized nationalized banks for having non-appreciable performance in implementing Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme.
J&K Bank, Khursheed A Ganai, FC Industries and tipped to be PSC boss, said conspicuous absence of other banks has created a situation that J&K Bank had no option other than taken upon itself to work for the welfare and development of this state.
Ganai, however, said these banks can not get away with their non-appreciable performance. Ganai was speaking at the day long seminar on the scheme that J&K Bank co-hosted with the Trust that implements the scheme. All the stakeholders in banking and industries sector were in attendance.
Financial Commissioner (Industries & Commerce), Khursheed Ahmad Ganai delivered presidential address. He said, “The objective of this seminar is to create awareness among our officers, general managers and other stake-holders from the industry. The idea is to bring clarity to the scheme, get answers to our questions and build further upon the knowledge.”
Urging taking serious note of the conspicuous absence of other banks at the function, he said, “J&K Bank has taken upon itself to work for the welfare and development of the people of this state should not let the other banks get away with their non-appreciable performance in implementing the scheme.”
He expressed his deep gratitude towards J&K Bank for making such functions possible.
During his concluding remarks, Financial Commissioner said, “Lack of awareness among the aspirants, lack of will on part of borrowers to get their cases covered under the CGTMSE scheme appear to be the main obstacles in its implementation.”
“We will take up the issue with Government of India suggesting that RBI must nudge all the banks to implement the scheme in a more substantial manner”, he said.
J&K Chairman & Chief Executive Officer, Mushtaq Ahmad said, “Based on our successful experience with SKEWPY, we shall hand hold the entrepreneurs and extend all types of financial assistance to them under MSME sector. We will see to it that our MSME borrowers get the required CGTMSE cover.”
“There were times when the banks pulled their shutters down and left the state and we not only shouldered the responsibility but have successfully got the society out of those hard times. We remain committed towards economic development of our people across the state”, Ahmad said while referring to the absence of other players from the banking sector.
“The main focus of the scheme has been to reach to every nook and corner of the state and help out the MSE sector. Since the formation of trust on August 27, 2000, the number of proposal received under the scheme is around 16 lakh under guaranteed cover of Rs79000 Crore”, said S L Chaudhry, CEO CGTMSE. “Today we are here to know what problems you face and what we can do to help you out so as to understand each other better.”
Listing the benefits and constraints of the CGTMSE Scheme during his address M P Singh ADC (MSME) said, “Credit is the life-line of any and every industry. Here in the state such clarity about the CGTMSE scheme assumes more importance for majority of industry units fall under MSME sector.”
“Because of immense flexibility and adaptability of MSME, the sector is generating employment for thousands of youth even in remotest corners of the country through wage and self-employment. However, lack of economies of scale, infra-structural constraints, financial illiteracy and low level of technology remain few of the constraining areas for the sector”, he said.
The flow of credit has already increased by around 23 percent (YoY) as against the annual target of 20 percent, he added.
During the technical session, President J&K Bank, Mohammad Amin Mir gave a power point presentation on the performance of J&K Bank in the scheme under MSME sector. Notably, as on July 31, 2014, under the scheme, the bank has covered 27154 cases through an amount of Rs 342.46 crore. Out of these 99.5 percent of the accounts have been covered under CGTMSE by the bank at its own cost to boost micro and small enterprises, Mir said. The bank has designated 40 Business Units as MSME branches with delegation of powers to Zonal Heads.
Pertinently, Credit Guarantee Fund Trust for Micro and Small Enterprises (CGFTMSE) was set up by the Government of India and SIDBI in 2000-01 with a corpus of Rs 125 crore with an objective to create an institutional mechanism to support banks and financial institutions to ensure availability of credit facility and easy access to institutional funds to the MSE sector.
CGTMSE covers registered Member Lending Institutions (MLI) which includes public and private sector banks, regional rural banks, foreign banks and financial institutions. The MLI strength of CGTMSE is 133.