Reserve Bank of India has said that banks are not fully equipped to promote small-scale enterprises and asked them to focus on lending to Small Scale Industries (SSI) sector with standard products.
"Banks are still not fully equipped to promote small scale enterprises since credit assessment and appraisal are not oriented for lending to this sector," RBI deputy governor K J Udeshi said yesterday at a function organised by the Gem and Jewellery Export Promotion Council (GJEPC).
Banks should realise small- and medium-scale enterprises (SMEs) must not be equated with high risk, she said.
With the advancement of technology in banks helping them to provide better service, they should also focus on lending to SME sector with standard products, she said.
Such financial assistance programmes also need to be devised to provide funds to those industries that were in the reserved list to enable them to expand and upgrade technology, Udeshi added.
