Working Chairperson, EFCAI (Entrepreneurs and Financial Customers Association of India) and former chairman, Orissa Assembly of Small and Medium Enterprise Harendra N Mahapatra has urged Union Finance Minister Nirmala Sitharaman to review the Covid 19 packages for MSMEs. Thanking the Central Government for extending GECL of 20% to the MSMEs, the forum alleged arm twisting by many NBFCs by not allowing moratorium for six months and also by not responding to restructuring proposals.
The association urged that since the micro and small borrowers are mostly affected by Covid 19, their enhancement proposals may be liberally considered by the banks in the same way as under the ECLG Scheme with special reference to relaxation in turnover and credit rating.
Besides, it said the equity support under the scheme may be allowed for functioning MSMEs with NPA accounts despite their age of NPA instead of considering only NPAs after 2018. In fact, the older the NPA, if still viable, preference must be given to such accounts for restructuring since the promoters must have strived hard to keep the company afloat. The reimbursement of interest on interest charged has not been followed in the true letter and spirit.
The amounts credited in many accounts have been very meager, even below Rs100 whereas the amounts charged were in thousands.
Especially Credit Card accounts are being levied with exorbitant rate of interest. RBI may kindly regulate the same, Mohapatra said in a memorandum to the FM, MSME Minister Nitin Gadkari, RBI Governer Shaktikanta Das and Union MSMEs Secretary AK Sharma.