It is a welcome move by the Reserve Bank of India in asking banks to acknowledge MSME (micro, small and medium enterprises) loan applications. At the same time, the central bank should strengthen banks, especially public sector banks, in the recovery of these loans. These loans most often become NPAs and the poor bankers have limited ways to recover them. Even securitisation is not helping banks in the recovery of loans. Also, the rights are not exercised by the genuine and needy borrowers. Not only MSME loans, even crop loans are not taken by the needy. There is no income-generation in the loans given to self-help groups. The RBI should ensure that loans are disbursed only to the really needy. If strict legislation with regard to recovery is enacted, any number of rights can be given to borrowers and the banks can be made accountable.
- I. Rama Rao, Visakhapatnam (HBL)
