Coimbatore: Industrialists opine that conflicting central GO's regarding bank loans and negligence of banks have hit the industrial sector hard. They say by now, loans to the tune of 10,000 crores should have been disbursed across the district of Coimbatore, but sadly banks have not sanctioned even 1,000 crores.
Coimbatore: Industrialists opine that conflicting central GO's regarding bank loans and negligence of banks have hit the industrial sector hard. They say by now, loans to the tune of 10,000 crores should have been disbursed across the district of Coimbatore, but sadly banks have not sanctioned even 1,000 crores.
The vice president of Southern India Engineering Manufacturers Association(SIEMA) K.V.Karthik said, "We wholeheartedly welcome the central government's initiative of helping industrialists in overcoming the current financial crisis, but conflicting GO's have severely affected many entrepreneurs as many are unable to avail bank loans.
Initially, central finance minister Nirmala Seetharaman announced that customers can avail loans of up to 10% of the sanctioned limit, irrespective of the loans they have availed and spent. She made a second announcement a few days later about allocation of 2 lakh crores for the industrial sector. She mentioned that loans can only be availed under a condition, that is, based on the total loan sanctioned and used until February 29, 20% of the sanctioned limit can be availed now. These conflicting orders caused a big impact on the industries because many of them did not avail the sanctioned limit at all. Due to this they are deemed not eligible for new loans.
Both the schemes announced by the central government have been implemented, but most of the banks have cut the former and are only implementing the latter. Cconsidering the welfare of the industrialists, the government also allotted Rs 45,000 crores as collateral support under Emergency Credit Guarantee Scheme to the banks that sanction loans through the second scheme.
This was announced to provide security to the banks so that they can allot loans to customers without obtaining any additional collateral. This being the case, banks demand collateral security from the customers. The banks demand additional MOD (multi option deposit) to the existing collateral security from its customers although many have given it already. Due to these unfortunate issues, the district, which is well known for MSME's and has the potential to avail Rs 10,000 crores under the central government's schemes,, has just witnessed less than 900 crores in loan disbursement. We have made representations to the central government on behalf of our association to address this issue."
President of Coimbatore, Tirupur districts Cottage and Micro enterprises Association( COTMA) said C.Siva Kumar, "At present, banks are providing loans to just the customers who perform well and those who have not become NPA's(non-performing assets). Considering the welfare of the entrepreneurs who have become NPA's, the central government has allocated Rs 20,000 crores, but when those customers contact the banks, they reply that they are yet to receive information about this."
He added, "Even those who have current accounts also need working capital, so when they approach the banks for loans based on their income tax returns etc., the banks just ignore them. At a meeting between the banks and industrialists, even Minister SP. Velumani and Coimbatore District Collector K Rajamani asked banks to consider the request of micro-industrialists, but there has been no response."
District Lead Bank Manager S. Vekataramanan said, "All the banks are trying their level best to help the customers in availing the benefits of the loan schemes. Loans to the tune of 900 crores have been disbursed across the district in the past 20 days. We did forward customers' requests to the centre, but we haven't received any notification so far."