Banks should seriously consider revival and restructuring of ODOP and MSMEs – putting entrepreneurs under debt pressure instead of encouraging them worrying
Prayagraj: Rajnikant Srivastava, candidate for the presidency of the K.P. Trust, said that leaving an entrepreneur’s project incomplete is an injustice to their years of hard work, capital investment, and future plans. An entrepreneur works hard for years to establish their business, saving every penny, and dreams of job creation and economic development based on bank financial support. However, if financial support is interrupted before the project is completed, the entrepreneur could face a serious financial crisis.
Shrivastava said that an entrepreneur who takes a loan from a bank to establish a project plans to pay the installments and interest from the income generated after the business starts. If the project is not completed on time, the debt pressure on the entrepreneur increases even before the entrepreneur’s income source is developed. In such circumstances, instead of focusing solely on recovering the outstanding amount, the bank should seriously consider the project’s actual status, its completion prospects, and the entrepreneur’s repayment capacity.
He stated that the Prime Minister is continuously making efforts to promote self-employment, startups, local products, and micro, small, and medium enterprises. While the government is encouraging entrepreneurship through the “Atmanirbhar Bharat” and “Vocal for Local” campaigns, if obstacles arise in completing a funded project and solutions like revival or restructuring are not adequately considered, this can impact entrepreneurial morale.
Citing a case involving Indian Bank, Srivastava said that the entrepreneur’s complaint stated that the project was not completed and the business could not be started, while the pressure of loan liabilities and interest continued to increase. In such a situation, the bank’s responsibility is to objectively review all the facts of the case, the current status of the project, its financial viability, and available banking provisions. Where feasible within the regulations, viable resolution, restructuring, or revival options should be considered.
He also stated that if bank officials shirk their responsibility by claiming that the Prime Minister’s or Chief Minister’s schemes are the government’s, not the bank’s, this approach cannot be considered consistent with the broader objective of promoting financial inclusion and entrepreneurship. Implementation of government policies should be in accordance with relevant regulations and banking provisions. Listening to entrepreneurs’ problems, providing appropriate guidance, and considering available solution options in deserving cases is an important responsibility of the banking system.
Rajnikant Srivastava stated that the bank’s objective should not only be to grant and recover loans, but also to play a responsible financial role in helping viable enterprises succeed. If practical difficulties arise in completing a project, it is essential to find solutions so that the entrepreneur can start a business, generate employment, and ultimately repay the bank loan.
He urged the competent authorities at Indian Bank to conduct a fair and timely review of the matter. Assessing the project’s actual status and the entrepreneur’s financial capacity, consider the possibility of revival, restructuring, or other appropriate solutions within applicable regulations. Furthermore, effective communication between bank officials and entrepreneurs should be ensured to avoid unnecessary disputes and financial pressure.
Srivastava said that the dream of a self-reliant India will only be realized when small and medium-sized entrepreneurs receive regulated guidance and appropriate opportunities, even in difficult circumstances. Instead of discouraging entrepreneurs, adopting a collaborative approach to ensure the success of their projects is the need of the hour.
