Banks not fully supporting SMEs: Minister
29/08/2016 09:49
Union Minister Nirmala Sitharaman has said that banks do not fully understand the problems faced by small and medium enterprises, whose performance has been hit by the high interest rate regime. The Commerce and Industry Minister had last week pitched for a 2 per cent cut in interest rate by the Reserve Bank to help the cash-starved MSME sector. Commenting on the issue, Union Minister Nirmala Sitharaman told the media, "I still hold that the cost of credit in India is high. Undoubtedly, particularly MSMEs, which creates a lot of jobs contribute to exports... are all hard pressed for money and for them, approaching a bank is no solution because of the prevailing rate of interest. I have no hesitation to say, yes 200 basis points, I would strongly recommend." RBI, which has maintained key interest rate at 6.5 per cent since April this year citing inflationary concerns, is scheduled to hold its next policy review on October 4.
