RBI Governor urges banks to treat MSMEs as long-term partners

Reserve Bank of India (RBI) Governor Sanjay Malhotra on Monday urged banks to treat Micro, Small and Medium Enterprises (MSMEs) as long-term partners.

The RBI chief said MSMEs are key to the ‘Viksit Bharat’ vision, calling them “entrepreneurship nurseries”. It was launching a special awareness program for MSME entrepreneurs in Kochi in conjunction with International MSME Day 2026, which falls on June 27.

Addressing around 150 MSME entrepreneurs from the state and senior officials from the banking sector, Mr. Malhotra highlighted the upcoming Unified Lending Interface (ULI) to streamline credit assessment. The technology-driven initiative aims to provide frictionless credit to every Indian and advance the Union government’s broader vision of digital empowerment, financial inclusion and last-mile service delivery.

He also urged entrepreneurs to engage with the Trade Receivables electronic Discount System (TreDS), a digital platform regulated by the RBI that helps MSMEs unlock working capital. He said it is important for SMEs to maintain financial discipline and transparency.

Contribution of MSMEs

He said MSMEs contribute about 45% of the country’s exports and provide jobs to around 33 million people, the largest employment created outside the agricultural sector. “These are not just numbers. These are proof of the ambition, dynamism and perseverance of MSMEs,” he said.

Mr. Malhotra praised Kochi’s entrepreneurial heritage, ranging from the spice trade to emerging sectors such as fintech and clean energy, and noted that MSME credit growth has outpaced overall credit growth and Kerala is a strong performer.

He said the RBI has introduced measures such as priority sector credit targets, higher unsecured loan threshold, TReDS, Account Aggregator framework and waiver of pre-closing charges to narrow the credit gap.

Organized by RBI Thiruvananthapuram, the event aimed to increase financial literacy among MSME entrepreneurs, raise awareness of formal credit channels and facilitate interaction between entrepreneurs, bankers and government institutions.

The program included technical sessions on access to credit, innovative financing solutions, MSME support schemes offered by SIDBI, RBI initiatives for the MSME sector and various schemes implemented by the Central and State governments. Successful entrepreneurs shared their experiences and insights, providing practical guidance to aspiring and existing MSME entrepreneurs.