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Govt, RBI discussing on allowing co-op banks to lend under ECLGS
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SME Times News Bureau | 11 Aug, 2020
As the Emergency Credit Line Guarantee Scheme, specially formed for
MSMEs, progresses, the government is considering allowing cooperative
banks to lend under it too.
Addressing a webinar at the
'FICCI-SBI Atmanirbhar MSME Virtual Conclave', Micro, Small and Medium
Industries Minister Nitin Gadkari said that the government is discussing
the matter with the Reserve Bank of India (RBI).
"Cooperative
banks that are not included as a member lending institutions under the
Emergency Credit Line Guarantee Scheme (ECLGS) will be included as
lenders for MSMEs, under a scheme being discussed in consultation with
the RBI," a FICCI statement quoted Gadkari as saying.
He also
urged the states to release payments due to MSMEs within 45 days, as
"this will help bring liquidity, which will accelerate the economic
growth of the country".
Gadkari emphasised that special focus
towards export enhancement is the need of the hour, and there is also a
need to focus on import substitution to replace imports with domestic
production.
He also urged the industry to identify the sectors
heavily reliant on imports, particularly from China, and look for
substitutes towards indigenous production to make India self-reliant.
Gadkari
also said that the government aims to increase MSMEs' contribution to
the GDP to 50 per cent and in share of exports to 60 per cent, which
would help the sector create 5 crore jobs in the next five years.
"The
government is formulating a special policy to generate employment in
the rural areas and aims to increase the turnover of village industries
and encourage medium scale units such as ago and food processing
industries, handloom, and handicrafts," he said.
State Bank of
India Chairman Rajnish Kumar said that the advancement of digital
technology has revolutionised the process of lending to MSMEs as the
availability of data and technology in the form of analytics has made it
easier to automate lending decisions to the sector.
"We will be using the digital platform in a big way for lending," he said.
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