Page 39 - Banking Finance December 2023

ARTICLE

Technology Adoption: Many MSMEs are slow to adopt new Receivable Discounting System (TReDs). The development
technologies, which can put them at a disadvantage of open-source digital platforms and ground-breaking
compared to larger companies. This can make it difficult for initiatives like PM GatiShakti, the National Logistics Policy,
them to compete in the market and keep up with changing and the Production-Linked Incentive (PLI) programmes are
customer demands. expected to boost the manufacturing output and shall
Regulatory Compliance: MSMEs are subject to a wide range further support economic growth.
of regulations, which can be difficult and costly to comply
with. This can be especially challenging for smaller Conclusion:

businesses, which may not have the resources to hire With a second-largest MSME base after China, the scope of
dedicated staff to handle compliance. small scale industries' expansion and proactive collaboration
is quite high. With low investment requirements,
Addressing these challenges can help support the growth operational flexibility and the capacity to develop
and success of the MSME sector. Developing innovative appropriate indigenous technology, MSMEs have the power
financial instruments can help cater to the unique needs of to propel India to new heights. The importance of MSME in
MSMEs in India. By addressing the challenges of collateral, the Indian economy stands unparalleled compared to any
supply chain financing, access to digital financial services, other sector. The ambitious target of $5 billion economy with
invoice financing, and credit guarantees, financial a 25% contribution from the manufacturing sector will
institutions can better serve the needs of MSMEs and require the MSME sector to play a pivotal role. In addition
support their growth and success. In order to increase to the various facilitating schemes announced by the
formal credit flow to MSMEs, the sector must be swiftly government to support the sector, ramping up investment
formalised. To address these challenges, several into the sector will be crucial. In conclusion, MSMEs are a
programmes have been implemented like Udyam, the Open key driver of the Indian economy, and they produce excellent
Credit Enablement Network (OCEN), and the Trade opportunity to Banks for their lending activity.

Co-op banks must approach RBI for name change

The Reserve Bank of India (RBI) has directed cooperative banks desirous of changing their name to approach the
Department of Supervision (DoS) of the concerned Regional Office for the grant of no objection certificate (NOC),
clearly stating the reasons for such change. The approval of the General Body of the bank will be mandatory at the
time of submitting such requests to RBI.

Referring to the notification of the Banking Regulation (Amendment) Act of 2020, RBI emphasised that in terms of
Section 49B, the Central Registrar of Cooperative Societies (CRCS)/ Registrar of Cooperative Societies (RCS) cannot
signify its approval to the change of name of any co-operative bank unless the Reserve Bank certifies in writing that
it has no objection to such change.
Further, in terms of Section 49C, no application for the confirmation of the alteration of bye-laws of a co-operative
can be maintainable unless Reserve Bank certifies that there is no objection to such alteration, per RBI’s directive to
urban co-operative banks, state co-operative banks and district central co-operative banks on “Banking Regulation
(Amendment) Act 2020 - Change in Name of Co-operative Banks” .
Co-operative Banks shall follow the outlined process for change in the name of the bank even if the name change is
due to government notification.
“No co-operative bank shall display/operate with amended name without effecting the corresponding change in its
name in the banking licence issued by the RBI . Further, the displayed name of the bank shall be strictly as per the
name in its banking licence,” RBI said.

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