Has RBI done enough to tackle the crisis?

I agree with your viewpoint Neha ji.In fact I have added an entire paragraph but unfortunately it has come LAST in the idea contest rating.Kindly view my opinion(it is at the bottom).

There is a saying that the god wants to bless the devotee but the priest prevents it.  The Government has done enough to instruct banks to lend to SMEs but banks are doing nothing.  I am not sure how far the SBI tie-up with DICGC for finance to SME sector will be effective, given the bank manager's mentality to discourage a borrower. 

Can we all join together to develop a private professional platform to list individual proejct profiles which can be viewed by banks and others?  The RBI sets targets and if quality projects are not available, the bank branch has to take projects from this platform and finance it.  During the course of appraisal, any negative finding also has to be updated on the profile. 

In any case, the culture itself is not there where an entrepreneur will confidently approach his banker for his business needs.  This is critical. 

I agree.  I think our accounting system should include automatic record of source of funds on every expenditure! 

Working capital is either money available for expenditure based on the borrower's capability to manipulate records or it is something which is not available at all!  This scenario should change. 

Banks have brought in various tools to determine drawing limits.  It is only at sanction stage that we see a lot of thought going into project appraisal.  After sanction, it is the ingenuity of the borrower that will be come important in making use of funds.  There is no handholding mechanism in place to meet business needs. 

For instance, why should there be a one-year period for renewal of a limit or enhancement?  If a genuine need arises, why shouldn't a borrower approach his bank say after two months for enhancement of limit?  It will be so easy for the bank to monitor the quality of its funding if the appraisal system is seamless.  In the instance I am quoting, appraisal parameters will be very simple.  Enhancement will be asked for on a single point or development that has arisen.  You appraise the need on that single point or development and restructure the facility.  Here, instead of the borrower manipulating the facility, the bank itself has clear record of what the borrower is doing.   

It is not out of place even to get a downloadable accounting package made ready by the RBI or any other agency like IT/Sales Tax/Excise etc.  It could be a collective exercise. 

Many use Tally.  Companies have enterprise software installed.  Others have their own systems.  There is no uniformity.  It is not standard of accounting that is important.  It is segregation of data and apportionment that will be important. 

When 100 different organisations have 100 different accounting systems, the Chartered Accountant will be king.  He will be the one to decide on the papers projected to the outside world.  He will have a free hand to finalise accounts. 

Lets look at the CA's office environment.  He does not usually audit a client's accounts.  His assistants do it and he is the signatory.  That makes the standard of auditing down by one full professional layer!

Look at Microsoft.  Their windows and MS Office have simplified working of many an organisation.  Standards are set.  You now either have an excel sheet or a word document or a power point presentation.  It is so widespread that organisations function under the parameter of standards set by ms office!

Any government initiative will not be user friendly.  There will always be the fear that data could be used for control and penalties.  A lot of effort has to be made to convince that the software is just downloaded and there will be no intrusion of privacy.