Bengaluru: The Micro, Small and Medium Enterprises (MSME) sector, which is on the road to recovery after taking a hit during the demonetisation drive, is caught in a bind yet again with the new regulations of State Bank of India, which mandates a minimum balance for savings accounts. Unable to meet the requirement, a large section of people employed in the sectorare likely to migrate to co-operative banks, say experts. Those running micro businesses, too, would consider closing their accounts with SBI and move to cooperative banks, they add.
While SBI has stipulated the minimum balance in savings account in different gradations depending on whether the accounts are in a metropolis, urban or rural area, those running small business in metropolitan cities are falling short of fulfilling the new norms.
The minimum stipulated balance for an account in a metropolis is Rs 5,000, while it is Rs 3,000 in urban areas, Rs 2,000 in semi-urban and Rs 1,000 in rural areas, failing which penalty will be imposed on the account holder.
In cooperative banks, the regulations are more conducive for small enterprises, noted Yagnanarayana, President, Laghu Udyog Bharti, Karnataka.
“You need to consider those employed as waiters or helpers in small eateries in a city like Bengaluru. Their salary may be Rs 5,000. How are they expected to maintain this balance?” asked Jayaram, a member of the Garment and Textile Workers Union, Bengaluru.
As far as the garment workers are concerned, there would not be a problem when it comes to their salary accounts, he said. “For salary purposes, the company transfers money through a corporate account. These accounts require no minimum balance. These accounts are functional only to receive and withdraw salaries. However, the same people would find it tough to maintain their savings accounts,” Jayaram added.
The Karnataka Smallscale Industries Association (Kassia) has opposed this move, according to Padmanabha, president, Kassia. Several employees in the MSME sector opened an account only post the demonetisation move, when factories were compelled to make online transfer of salaries. For these people, even ensuring Rs 3,000 or Rs 1,000 would be difficult.
Source: The New Indian Express
