Mumbai: A delegation of the Action Committee for ‘Formal Finance For Non Corporate Small Business’ met Mr. K.V.Kamath, Chairman, ICICI Bank at Mumbai. Mr. Kamth is also chairing a Committee on Financial Architecture on MSME constituted by Finance Ministry in pursuance of budget announcement of Union Finance Minister Mr. Arun Jaitley to create a separate financial architecture for non corporate sector of the Country. The Kamath Committee has to submit its report within three months to Union Finance Minister.
The delegation was led by Mr. Praveen Khandelwal, National Coordinator of the Action Committee comprising of Mr. B.C.Bhartia, President, Confederation of All India Traders (CAIT), Mr. Shekar Swamy, retail expert, Mr. Kirti Rana, President, Navi Mumbai Merchants Association, CAIT Maharashtra Vice President Mr. Ramesh Kotadia and other trade leaders.
While talking to Mr. Kamath, the delegation apprised him that only 4% of non corporate sector could able to obtain finances from core banking sector though the sector is contributing 45% to National GDP and generating 90% employment in the Country yet it is deprived of the formal finance. The delegation also stressed the need to define non corporate sector as self organised in place of unorganized sector. The delegation brought to his notice that nearly 60% people of backward classes owned the ownership of business enterprises in non corporate sector. Therefore, there is a need of creation of a separate and independent and viable financial architecture for non corporate sector.
While talking to the delegation, Mr. Kamath said that now it is the right time when person standing at the last mile should be given requisite finances for operation of business activities and opined that independent finance institutions or companies can play a major role in extending financial assistance directly or through local channels to last mile person. He agreed with the delegation that creating such a financial architecture will result into both financial and social inclusion of the people engaged in non corporate sector.
Mr. Kamath also appreciated the contribution of non corporate sector in employment, domestic manufacturing, exports and in GDP contribution and said that the sector needs right categorization as "self organised" instead of unorganised.He was of the view that there can be provision for credit guarantee scheme by charging nominal influence premium. It will make finance system self sustain without any government monetary assistance.
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