Banking practices to support Entrepreneurship in India to fight COVID & Recession

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Respected Sirs,

Greetings. 

We appreciate your efforts to solve the COVID-19 pandemic crisis and we are implementing and strongly supporting your efforts of Social Distancing, Washing Hands, Lockdown, Covering face with mask etc..

At the same time we the #Startup & #MSME entrepreneurs, employers and employees have been undergoing through very difficult time & due to economic recession caused by COVID 19. Based on our experiences we humbly request you the following:

1. Bank interest rates for MSME & Startup should not be more than 4% off Repo Rate i.e. the interest rates on loans should be within 8.4%(4.4+4). Present Interest rate asked by Banks to MSME is 10% to 18% which is not sustainable as hardly any business can make profit of 25% to 35%, and no entrepreneur will take risk in such high interest rate, unless he/she has a motive to default. 

2. To promote export there should be interest subvention based on export to revenue ratio. e.g. if 10% of revenue comes from export then there should be 1% interest subvention & cap on interest subvention can be 4%. This will encourage entrepreneurs to fill up the vacuum created by China.

3. Application of loans should be through online platform which can be monitored in real time by Ministries & RBI to increase speed & decrease corruption. 

4. MSMEs & Startups should be allowed to take loan up-to 5 times of collateral provided to the Bank or NBFC. 

5. Give additional Grants of INR 25 lakhs and collateral free Soft Loan of INR 75 lakhs to Startups who are operational and have been awarded in yesteryears by IIGP, I3, ETPOI, ANIC etc within 1 month to sustain for next few months and grow; as funding availability is less at this point of time. The execution should be through the agencies who had selected and awarded these Startups. This effort can save 1000s of startups with a small allocation of INR1000Cr.  

Sir, we humbly request you to get it implemented within 2 weeks time, so that many Startups and MSME can not only survive but also grow to fill the vacuum being created due to COVID-19 and help the whole humanity.

Looking forward for an early implementation of our humble requests.