West Bengal's former finance minister Amit Mitra on Monday in a letter to Union Finance Minister Nirmala Sitharaman pointed out that some 40,000 weavers and artisans of the state have been denied loans due to "stringent notifications" brought out by the central government and the RBI.
Mitra, now designated Principal Chief Adviser to West Bengal CM, in his missive sought to allow self-certification instead of requirements of submitting PAN for these impoverished micro-entrepreneurs, whose income was far below taxable limits.
The letter comes at a time when Kolkata is hosting a G20 summit on financial inclusion.
"You would be shocked to know that there is a staggering 66 per cent rejection rate for weavers ... and 62 per cent for artisans. These artisans had gone through District Investment Centre's and held Artisan's Credit cards," Mitra said in his letter.
He said at a recent meeting of the State level bankers' committee which he mentored, it became evident that "the cause of such huge rejection by banks was stringent notifications by the government making mandatory a variety of requirements including PAN cards, etc.."
The former West Bengal finance minister who is a well-known economist, also said that these notifications have tied the hands of the bankers from granting these micro-loans and led to massive rejections of otherwise prudent lending.
"This is even more pertinent at a time when G20 is been held under India's presidency. You are aware the G20 nations, have made financial inclusion of SMEs and micro enterprises as their focus area in the global action plan," he wrote.
"Your urgent intervention is critical for 'financial inclusion'” of the entrepreneurs from the bottom of the pyramid. I humbly urge you to persuade both RBI and MSME departments of GOI to rectify the notifications and allow self-certification by Mike weavers and artisans for bank loan applications, as was the case in the initial notification," he wrote.