India Development News & Foreign Investment Opportunities

Banks support for MSMEs mandated

Advances of MSMEs up by 8.9% on year


Advances of MSMEs up by 8.9% on year




Indian banks have been mandated to provide a fixed percentage of their lending to the Micro, Small and Medium Enterprises (MSMEs), said Reserve Bank of India’s (RBI) Deputy Governor N S Vishwanathan.

Inaugurated FIBAC 2018, India’s largest conference on banking in Mumbai on 20 Aug 2018, he pointed out that credit to the sector has grown.

“Bank advances to the MSME sector have clocked an impressive year-on-year growth of 8.9% during the first quarter of ’18-19. This indicates that the credit flow to the sector has turned robust,” he said.

“The MSME sector plays an important role in any economy, and India is no exception,” he said.

Recognising their role as providers of employment and generators of export, the Government and RBI have taken affirmative measures to strengthen the sector.

And in order to ensure that the larger entities within the sector do not crowd out the smaller ones, the banks have been given specific targets to address the latter group, he said.

RBI has also put in place a framework to contain the probability of failure of large banks. He informed that this is an ongoing process and will keep undergoing improvements.

He also touched upon the need for additional capital for the domestic systematically important banks in India.

FIBAC 2018 was organised jointly by Federation of Indian Chambers of Commerce and Industry (FICCI) and Indian Banks’ Association (IBA).

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