Nitin Gadkari will meet with bankers and other interested parties to solve the problems of MSMEs on September 5

NEW DELHI: Minister of MSMEs Nitin Gadkari He called a meeting of bank chiefs, finance ministry officials and general managers of several central UPMs on Thursday to solve the problem of payment delays faced by small and medium-sized businesses, sources said.

MSMEs have expressed concern about the failure of the Micro and Small Business Facilitation Council (MSEFC) in the resolution of late payment cases within the stipulated 90 days.

This important issue is on the agenda of the September meeting convened by Minister Gadkari, an official said.

In addition to representatives of micro, small and medium enterprises (MSMEs), the meeting will be attended by heads of several banks, finance ministry officials, head of public sector units, UT officials and state governments, they added.

The meeting may also consider the modification of the relevant rules governing the sector for the recovery of fees for arrears in land revenues. The MSEFC of Madhya Pradesh , Bihar and Jharkhand have such provisions.

One can also consider replicating the Tamil Nadu model where the president of the state's MSEFC uses the videoconferencing facility to accelerate the settlement of MSME payments.

In addition, the proposal to establish more than one MSEFC in each state is also on the agenda.

The provisions of the MSMED Act are implemented by MSEFC chaired by the director of state/UT industries that has administrative control of the MSE units.

The state government/UT is expected to ensure that the MSE facilitation council holds meetings regularly and cases of late payment are decided by the councils within a 90-day period.

Under the Law, an MSME buyer can pay compound interest with the monthly installments to the provider on the amount three times the bank rate notified by RBI in case he fails to make the payment within 45 days.