Date:07/05/2005 URL: http://www.thehindubusinessline.com/2005/05/07/stories/2005050701990600.htm

Back Reviving sick SSIs: Empower bank boards, says RBI panel

Our Bureau

Mumbai , May 5

BANK boards should be given the freedom to lay down their own guidelines with regard to parameters for relief to sick small scale and medium enterprises.

This was one of the recommendations laid down by the internal group to review guidelines on credit flow to small and medium enterprises sector, set up by the Reserve Bank of India.

RBI released the draft report of the group on Thursday. The group was set up to review guidelines issued by RBI for aiding sick small scale industries (SSI).

The group also called for co-ordination between banks, financial institutions and State Governments to ensure smooth flow of credit to the SSIs and medium enterprises.

Setting up of committees at regional level to periodically review the progress made by this sector and opening of special SME branches in areas that have a large number of SME are some of the other recommendations.

In order to revive sick SSIs, bank boards should be empowered to formulate policies relating to restructuring of accounts of the units subject to certain guidelines.