Government Unveils Credit Assessment Model to Streamline Loan Appraisal for MSMEs

The government has introduced the Credit Assessment Model (CAM) for Micro, Small & Medium Enterprises (MSMEs), as informed to Parliament. This model uses digital data from the ecosystem to automate MSME loan appraisals. It provides objective decisions for all loan applications and assesses limits for both Existing to Bank (ETB) and New to Bank (NTB) MSME borrowers, according to Minister of State for Finance Pankaj Chaudhary.

Efforts to promote digital payments have been ongoing, involving the Government, Reserve Bank of India (RBI), and National Payment Corporation of India (NPCI). Initiatives include an incentive scheme for RuPay Debit Cards and low-value BHIM-UPI transactions. The Payments Infrastructure Development Fund (PIDF) supports deploying digital payment infrastructure like POS terminals and QR codes in underserved areas.

Pradhan Mantri Street Vendors Scheme

The Pradhan Mantri Street Vendors AtmaNirbhar Nidhi (PM SVANidhi) Scheme, launched in June 2020, has been extended until March 31, 2030. Jointly implemented by the Ministry of Housing and Urban Affairs (MoHUA) and the Department of Financial Services, this scheme enhances loans for street vendors to Rs 15,000, Rs 25,000, and Rs 50,000 in three tranches. It also includes a UPI-linked RuPay Credit Card with a Rs 30,000 credit limit and cashback incentives for digital transactions.

Chaudhary highlighted RBI guidelines on customer services in banks. These guidelines ensure banks use regional languages to align their services with local needs. Banks are advised to have policies for branch management, including displaying indicator boards at counters and providing customers with booklets detailing available services. Printed materials like forms and passbooks should be available in Hindi, English, and regional languages.

Enhancing Customer Service in Banks

Banks are also encouraged to establish multilingual contact centres and digital channels offering assistance in regional languages. The Department of Financial Services has advised Public Sector Banks (PSBs) to adhere to RBI's instructions regarding customer service language use. RBI has reiterated that communications with customers should be in Hindi, English, and the regional language.

The Indian Banks Association (IBA) has advised PSBs to develop policies for recruiting Local Bank Officers (LBOs). This ensures effective communication with local customers in their language, especially in rural and semi-urban areas. PSBs actively pursue this policy to enhance customer interactions.

Customer Service Associates (CSAs) handle front-end customer service functions in PSBs. During recruitment, CSAs must pass a Local Language Proficiency Test (LPT) for the official language of the state or union territory where they will work. This requirement ensures seamless communication in regional languages, improving customer service effectiveness.

With inputs from PTI