Business
Recently, industry representatives had written to Finance Minister Nirmala Sitharaman that enough loans are not being disbursed to small businesses.
Updated : Aug 20, 2019, 01:30 AM IST
There is no dearth of loans from banks, provided the borrower fulfills all the eligibility criteria, a top bank official said on Monday. He denied allegations of representatives of trade and industry that businesses, especially the smaller ones, are deprived of loans.
Recently, industry representatives had written to Finance Minister Nirmala Sitharaman that enough loans are not being disbursed to small businesses.
"Whenever the client fulfills all conditions, loans are disbursed," said Vikramaditya Singh Khichi, executive director of Bank of Baroda while interacting with media persons after a two-day consultative meeting of the top officials of the bank and the staff at branch level. He denied that banks are responsible for the liquidity crisis faced by the industry.
"Why small businesses are not getting payments on time? Who is responsible?" he asked, indicating that banks have no role to play in the liquidity crisis. Small businesses have time and again complained to the government that large companies, to whom they supply goods, are not paying them on time.
Brainstorming |
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Bank of Baroda is aligning its banking activities with priorities of the government, bank executive director Vikramaditya Singh Khichi said |
For this, a two-day brainstorming workshop was held in Ahmedabad |
Top officials of the bank had an interactive session with junior officers and staff at branches |
Now a state-level meeting of all the banks will be held on August 22-23 |
Recently, the Gujarat Chamber of Commerce and Industry (GCCI) had written a letter to the finance minister that banks are keen to lend to big businesses but not to small businesses. It had also suggested that considering the current business scenario, norms related to the declaration of accounts as Non-Performing Assets (NPAs) should be relaxed. "No other bank other than the Reserve Bank of India has the authority to take a call on delinquency norms. It is up to RBI to extend the payment period," he clarified.
Replying to an allegation that even as the Monetary Policy Committee (MPC) of RBI has reduced repo rates on four successive occasions, banks are not transmitting the same to the commercial borrowers, Khichi said that interest rates for lending depend upon the net cost of funds and not just repo rate.
"We have older funds and deposits, which have higher interest rates. So reducing repo rate does not have an immediate impact on the interest rates. It has a bit of lag. But we have recently launched a housing loan product, which is directly linked with repo rates," he said.
He further added that Bank of Baroda has recently reduced the interest rates by 30 basis points.