Association of Small, Tiny Industries highlights issues

President of Small & Tiny Industries Association addressing press conference at Jammu on Wednesday. — Excelsior/Rakesh
President of Small & Tiny Industries Association addressing press conference at Jammu on Wednesday. — Excelsior/Rakesh

Excelsior Correspondent

JAMMU, July 17: While highlighting the issues of small industries president of Association of Small and Tiny Industries, Harbinder Singh today accused the banks of misusing the SARFAESI Act provisions for loan recovery.
Addressing the media persons here today , Harbinder Singh said the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act 2002 is a powerful instrument in the hands of the banks and financial institutions (FIs) as secured creditors. This Act helps them enforce securities held as collateral to loans disbursed by them should such loans turn out as Non-Performing Assets (NPAs) during the currency of the loan without interference from the courts. Section 13 of the Act gives power to the secured creditor even to evict the tenant.

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It is our observation that the banks have been over-enthusiastic in taking recourse to SAFRAESI Act provisions as a first resort of recovering the micro, small and medium enterprises (MSME) loans, mostly violating guidelines of Reserve Bank of India (RBI).
He said the entire process under the Act involves several factors of fairness and technicalities. “During our interactions with the borrowers and banks, we have noticed the banks jumping into coercive actions throwing overboard the due processes. It is surprising that tech-savvy systems of banks have not put in the measured timelines before pressing the red button to put the credit traffic of the MSME on halt”.
Ajay Jagotra, I P Singh and Paramjeet Singh mentioned that the interest should be waived off by PDD. It was in the budget announcement 2018-19 of the State Government with regard to amnesty scheme for industrialists, small scale industries and sick industries – waiving off interest, penalty and surcharge on power dues by the State Government. He said that it appears to be like the Administrative Department of PDD is a sort of Government within the Government, which is charging interest on interest and disconnecting power connections of small scale industries and forcing it to shut down or become sick units. He also requested that the demand charges should be removed or rationalized.
Darshan Lal mentioned about material components liabilities of the Government departments towards small scale units. There are many pending payments for the material purchased by the Rural Development Department, Jammu Municipal Corporation and other Government departments which is not released from the last 2-3 years to the Micro industries due to which many micro industries have suffered. He demanded that the payment of such materials should be released as soon as possible.