Hyderabad: A large number of small and medium enterprises providing jobs to 30 lakh people in the state face the risk of turning into non-performing assets.
These industries have defaulted on repayment of loans in November and December after demonetisation. Banks have warned them that if they fail to repay this in 90 days, they would be declared as NPAs. Banks generally seize NPAs.
TS has nearly 1.1 lakh SMEs, which owe banks Rs 88,000 crore. “Production has stopped. There is money in our accounts, but we are not able to draw it as no bank is implementing the norm of allowing Rs 50,000 withdrawal,” All India Forum for Small and Medium Industries convener K. Koteshwar Rao said.
90 per cent of units may turn NPAs in January
All India Forum for Small and Medium Industries convener K. Koteshwar Rao said, several units had defaulted on payments in November and December. “If we fail to repay in January, which is bound to happen with no production for two months, our loan accounts will become NPAs as per existing norms,” he said. He said 90 per cent of the units could be declared NPAs in January.
“For every Rs 1 crore investment made in SMEs, 40 people get employment. The SMEs employ over 30 lakh people in the state. If our units are declared NPAs, it will pose a threat to the livelihood of lakhs of people,” Mr Rao said, adding, “Many of us have failed to pay salaries for staff due to cash crunch,” he said.
The forum took up the issue with industries minister K.T. Rama Rao and urged him to hold a meeting with bankers to avoid to avoid the prospect of seizure and auction of assets. “No one knows when the cash situation will improve. Officials say it may take six months. We want the banks to stop declaring us NPAs,” he said.
