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SBI strike: Small-scale sector in SOS mode

BAD news has started trickling in for nearly 1.6 lakh small-scale entrepreneurs in the State. An indefinite strike by State Bank of India (SBI) employees has virtually frozen credit limits for raw material supplies to the small-scale sector. It?s been six days since SBI employees went on strike. The small-scale sector has already started giving distress calls.

india Updated: Apr 09, 2006 01:10 IST
HTC
HTC
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BAD news has started trickling in for nearly 1.6 lakh small-scale entrepreneurs in the State.

An indefinite strike by State Bank of India (SBI) employees has virtually frozen credit limits for raw material supplies to the small-scale sector. It’s been six days since SBI employees went on strike. The small-scale sector has already started giving distress calls.

“Since payments have not been credited to suppliers’ accounts in various SBI branches in the past six days, raw material supplies for most small-scale units in Uttar Pradesh have become inconsistent. It’s a frightening situation for most small entrepreneurs. Work in many factories has already come to a grinding halt,” Indian Industries Association (IIA) executive director D S Verma told the HT.

He said the quantum of financial losses suffered by the small entrepreneurs in the past six days of the strike was incalculable. “It (losses) could run into thousands of crores. Most of the small entrepreneurs in the State are yet to pay salaries of their employees, as most of their transactions are handled by various SBI branches,” Verma said.

An IIA member from Unnao G N Mishra commented, “The supplies from my industrial unit in Unnao cater to government departments. I am sitting with Demand Drafts (DDs) worth Rs 20 lakhs right now, which were issued by the SBI.

The Andhra Bank, where I have an account, was accepting DDs issued by the SBI for the past few days. A recent RBI directive to other public sector banks not to accept SBI DDs has put me in serious trouble,” he said. “A majority of government transactions are made by the SBI. If the Union Government had divided these transactions among other banks, there would not have been such a crisis in the wake of the strike,” he said. ,

First Published: Apr 09, 2006 01:10 IST