Amit Mitra writes to Finance Minister, raises rejection of loans to Bengal weavers

He says that stringent requirements due to notification by the Centre and the RBI have tied the hands of banks from lending to micro enterprises

Former Finance Minister of West Bengal Amit Mitra in a letter to Union Finance Minister Nirmala Sitharaman raised the issue of the rejection of 40,000 bank applications of weavers and artisans in West Bengal.

 “You would be shocked to know that in West Bengal alone, out of 15,298 weavers who applied for loans as many as 10,108 faced rejections by banks- a staggering 66%, rejection rate, between April 2022 and September 2022 (six months period),” said Mr. Mitra, who is also principal chief adviser to the Chief Minister Mamata Banerjee as well as to the State’s Finance Department.

He also added that all of the applications that have been rejected have been vetted by the District Industries Centres (DICs) as required by the banks and those who had applied had weavers credit card.

“Similarly, out of 48,153 applications for loans, from the artisans of the State, 29,656 applications were rejected by banks- again a staggering 62% rejection rate. These artisans too have gone through vetting by DICs and were holders of artisans’ credit cards,” Mr. Mitra said in the letter.

He said that it had become evident at the State Level Bankers’ Committee the cause of such huge rejections by the banks was a notification by the Government of India which made mandatory “a variety of requirements including PAN card etc., for even these micro weavers and artisans. Unfortunately, RBI too has brought out a similar stringent notification”.

Mr. Mitra said that these notifications of the Government of India and the RBI have tied the hands of the bankers from lending to the micro enterprises, leading to massive rejections. The former West Bengal Finance Minister said that the State’s Chief Secretary had flagged this issue in the presence of the Prime Minister in Delhi.

 “Therefore, I humbly urge you to persuade both RBI and MSME Department of Government of India to rectify the notifications and allow self-certification by micro weavers and artisans for bank loan applications,” the letter said.