Public Sector Banks Finance To MSME

The banking system occupies an important place in a nation’s economy. A banking institution is indispensable in a modern society. It plays a pivotal role in the economic development of a country and forms the core of the money market in an advance country. With the effects of the globalisation, banking sectors become highly competitive and technology based with multidimensional products to the customers and public. Commercial banks particularly public sectors banks are extremely responsible to the provide financial support to industrial sectors not only for generate revenue but also for the development of industries in a particular region which the banks is located. MSME needs liberal financial assistance from commercial banks to establish and extent their business operation to meet the global competition.RBI has formulated several policies regarding financing to priority sectors particularly in small industries in the country. Naga Sridhar(2008), in his article “Steady Growth in Public Sector Banks” SME lending money says that the small and medium enterprises (SMEs) are departing from their traditional strong hold sectors and are venturing into new areas if the trends in SME lending by some banks in 2007 are any indication to go by. There has been greater interest float SMEs in relatively newer sectors such as hospitality, hospitals and travel agencies in addition to the popular areas such as textiles, fertilizers, gems and jewellery, according to bankers