The Hindu : Tamil Nadu / Chennai News : Sanction loans to small, medium entrepreneurs: Chidambaram

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Sunday, Nov 26, 2006
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Sanction loans to small, medium entrepreneurs: Chidambaram

Special Correspondent

No need for collateral security, Centre will stand by them, says Minister

WITH A SMILE : Union Finance Minister P. Chidambaram being greeted by K.C.Chakrabarthy, Chairman and Managing Director, Indian Bank (right) and T.S.Narayanasami, Chairman and Managing Dirctor, Indian Overseas Bank, at a seminar in Chennai on Saturday . — Photo : N. Sridharan

CHENNAI: Union Finance Minister P. Chidambaram has called upon managers of public sector banks to sanction loans up to Rs. 5 lakh to small and medium entrepreneurs without collateral security as the Centre would stand by them.

Inaugurating a seminar on `Development of rural and micro industries' organised by the Tamil Nadu Association of Entrepreneurs of Rural Industries and Micro Enterprises here on Saturday,

Mr. Chidambaram said though there were clear-cut guidelines from top brass of public sector banks and the Finance Ministry, branch managers were reluctant to sanction loans, fearing questioning by the Central Bureau of Investigation or the Central Vigilance Commission.

Mr. Chidambaram was responding to A.S. Kannan, former MLA and president of TACT, that the public sector banks were not coming forward to give loans to small, medium and micro enterprises entrepreneurs.

Fiat promised

Pointing out that there was a scheme for opening a savings bank account by maintaining just Rs. 500 or Rs.1,000 as the case may be, the Finance Minister said he would direct branch managers to encourage entrepreneurs who wanted to open such accounts. "There are clear-cut instructions from Reserve Bank of India and if you want the Finance Minister to reiterate to the bank managers of the public sector banks, I will do so," he said amid applause from small, medium, and micro enterprises entrepreneurs.

He asked entrepreneurs whose business had reported losses to the extent of Rs.10 crore to make best use of the one-time settlement scheme. He listed the other safeguards of Venture Capital Fund provided by the Small Industries Development Bank of India (SIDBI) and mentioned the availability of the Credit Guarantee Fund.

State Electricity Minister Arcot N. Veerasamy said the State Government would consider the demand of the entrepreneurs, who had sought free 10-horse power electricity, after consulting Chief Minister M.Karunanidhi. He said most private players preferred Tamil Nadu since Kerala had labour problems, land prices in Karnataka were not affordable and Andhra Pradesh had naxalite problems. M.S. Parthasarathy, founder president, National Confederation of Small Industry (NACOSI), V.S. Narasimhan, president, Small Industry Management Association (SIMA), DE. Ramakrishnan, president, NACOSI, T.S. Narayanasami, Chairman and Managing Director of Indian Overseas Bank, K.C. Chakarabarthy, Chairman and Managing Director of Indian Bank, participated.

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