News: Chamber suggests separate bank for Indian SMEs

(PTI 17/07/2006) Coimbatore - The local chapter of Indian Chamber of Commerce and Industry has suggested creation of a separate bank for Small and Medium Enterprises to protect their interest and also help in their day-to-day banking operations.

In a memorandum submitted to Shyamala Gopinath, Deputy Governor, RBI, recently in the city, the Chamber said on the lines of SIDBI supporting small industries for their industrial development, there should be a separate bank to protect SMEs.

Saying that high cost for EFT was discouraging their use --Indian Bank charges Rs 250 per lakh, while Tamil Nadu Mercantile Bank Rs 100--, Chamber President, A Shaktivel said there was lack of enthusiasm from the banks for the products and non-availability of facilities at many branches.

The statements of accounts furnished by the banks did not contain cheque numbers, the most important data in a banking transaction. The ICICI Bank was informing that due to certain system inefficiencies the details were not getting captured, Shaktive pointed out.

The system should be suitably upgraded so that cheque numbers and location of the collection centres could be viewed in the net by the brokers, he said.

On five per cent exposure limit for capital market, he said this was affecting the funding and credit facilities extended to share brokers. Apart from regular facilities, the banks should provide an adhoc limit of emergency funding.