The District Development Commissioner (DDC) Kupwara, Doifode Sagar Dattatray, who is also Chairman DLRC Kupwara, today issued a circular direction where under Banks and financial institutions were asked to implement the RBI guidelines regarding sanction of loan without collateral security or guarantor up to Rs 10lakh, in letter and spirit.
The circular reads as "The Ministry of Micro, Small and Medium Enterprises vide Office Memorandum bearing No. PMEGP/Policy/09/2021, Dated:- 13-05-2022 has conveyed approval for continuation of PMEGP Scheme for five years from Financial Year 2021-22 to Financial Year 2025-26.
It is clearly mentioned in the circular of PMEGP guidelines that "No Collateral Security will be insisted upon by banks in line with the guidelines of RBI for projects involving loan upto Rs. 10.00 Lacs in respect of projects forwarded to them by the agencies.
The circular further reads that RBI Master directions-lending to Micro, Small and Medium Enterprises (MSME Sector); "Banks are mandated not to accept collateral security in case of loans upto Rs. 10.00 Lacs extended to the units in the MSME sector.
Banks are advised to extend Collateral-free loans upto Rs. 10.00 Lacs to all units financed under Prime Minister's Employment Generation Programme (PMEGP) administrated by KVIC" The DDC further in the circular directions said that In view of the above mentioned guidelines, it is impressed upon all the Heads of Banks/Financial Institutions to follow the guidelines in letter and spirit and extend collateral free loans without any requirement or guarantor upto a limit of Rs. 10.00 Lacs for PMEGP cases.
Any casual approach or reluctance on the part of any Bank Branch Manager shall be dealt with seriously and necessary disciplinary action as warranted under rules shall be initiated against the delinquent Officer /Official.