Bengal CM's adviser asks Finance Minister to look into rejection of artisans' bank loans

Principal Chief Adviser to West Bengal Chief Minister Mamata Banerjee and former state Finance Minister, Amit Mitra on Monday sought urgent intervention of Union Finance Minister Nirmala Sitharaman over banks' rejecting loan applications of more than 60 per cent artisans in the state, which, he said, happened despite financial inclusion being the focus for G20 nations and India heading its presidency.

In a letter to Sitharaman, Mitra wrote: "You would be shocked to know that in West Bengal alone, out of the 15,298 weavers who applied for loan, as many as 10,108 faced rejection by banks, a staggering 66 per cent rejection rate between April 2022 and September 2022. All their applications had been vetted by the district industries centres as a requirement by the banks. Furthermore all of them were holders of weavers' credit card as well."

Similarly, he said further, out of 48,153 applications for loans from the artisans of the state, 29,656 applications were rejected by banks, again a staggering 62 per cent rejection rate.

This, Mitra said, has happened when G-20 nations have made financial inclusion of SMEs as their focus area in their global action plan.

"In a recent meeting of the state level bankers' committee, it became evident that the cause of such huge rejections by banks was the stringent notification by the Central government which made mandatory, a variety of requirements including PAN card etc for even those micro weavers and artisans. Unfortunately, the RBI too has brought out a similar stringent notification. These notifications are totally divorced from the ground reality of min-micro enterprises of the country, which are simply crying out for 'financial inclusion' to grow their enterprises and livelihood," he wrote.

He informed the Finance Minister that the state Chief Secretary too had flagged this issue a few days ago in the presence of the Prime Minister in Delhi.

Urging Sitharaman to urgently intervene in the matter, Mitra has requested her to "pursuade both RBI and MSME department of the Central government to rectify the notifications and allow self certification by micro weavers and artisans for bank loan applications as was the case in the initial notification".

"If weavers and artisans of West Bengal alone have faced 40,000 rejections of bank loans, the number of such rejections could well be to the tune of 5 to 10 lakhs in the country as a whole. Your urgent intervention is critical for 'financial inclusion' of the entrepreneurs from the bottom of the pyramid," Mitra said.