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RBI to allow banks to fix credit norms for SSIs

The Reserve Bank of India has decided to accept 35 out of 126 recommendations of the high-level committee on credit to small scale industries for immediate implementation.

In a circular issued recently to chief executives of all commercial banks, including regional rural banks, the RBI has asked banks to take appropriate action for implementation of the committee's recommendations.

Some of them are: delegation of more powers to branch managers to grant ad-hoc limits, simplification of application forms, freedom to banks to decide their own norms for assessment of credit requirements, opening up of more specialised SSI branches, enhancement in the limit for composite loans to Rs 500,000, strengthening the recovery mechanism, paying more attention to the backward states, special programmes for training branch managers for appraising small projects and making customers grievance machinery more transparent and simplifying the procedures for handling complaints and their monitoring.

The one-man committee headed by a former Union secretary S L Kapur had submitted its report to the RBI governor on June 30, 1998.

UNI