RBI governor asks banks to treat MSMEs as long-term partners

Reserve Bank of India (RBI) governor Sanjay Malhotra on Monday called on banks and financial institutions to deepen their engagement with the micro, small and medium enterprises (MSME) sector, saying small businesses should be treated as long-term business partners rather than merely a regulatory obligation.

Speaking at the inauguration of the week-long celebrations leading up to International MSME Day 2026 in Kochi, Malhotra outlined a three-pronged agenda for financial institutions to strengthen credit access and support the growth of the sector.

“MSMEs should not be considered as a regulatory obligation alone, but as long-term business partners whose sustained growth generates durable financial returns and broad social value,” he said.

He asked financial institutions to make greater use of India's digital public infrastructure, including the account aggregator framework, the Unified Lending Interface (ULI), Trade Receivables Discounting System (TReDS), GST data trails and Aadhaar-enabled authentication, to build a more inclusive credit ecosystem.

He also asked banks and non-banking financial companies (NBFCs) to accelerate the implementation of various government-backed programmes such as priority sector lending, Mudra, PM-SWANIDHI, PM Vishwakarma, credit guarantee scheme for micro and small enterprises.

Highlighting the importance of combining technology with personalised customer engagement, the governor added that relationship banking, deepened and informed by digital data, can be a powerful and humanising complement to technology-led credit delivery.

Malhotra also urged MSMEs to take greater responsibility for their own growth and formalisation and called upon MSMEs to use platforms and frameworks developed to improve access to credit and financial services.

“Benefits of government schemes can be availed only for units registered under URC. I request all of you to register, which is entirely online and free of charge, relying on PAN and Aadhaar,” he said.

Malhotra also stressed the importance of financial discipline and trust in building sustainable enterprises.

“Just like quality and timely delivery are essential to build trust for long relationship with customers… similarly, formalisation, digital adoption and financial discipline are vital for securing and sustaining the trust of financiers,” he said.

He concluded by commending the country’s entrepreneurs for their contribution to economic growth, saying they often build businesses quietly and without commensurate reward or recognition while continuing to demonstrate resilience and enterprise.

Subhana Shaikh is a business journalist at Mint, where she covers the Reserve Bank of India, monetary policy, and India’s bond markets. She has seven years of experience in reporting on financial markets, with a focus on banking and the broader financial system.<br><br>She began her career after completing her postgraduate diploma at the Indian Institute of Journalism and New Media, Bengaluru. She then spent five years at Informist Media, a news wire agency, where she closely tracked bond markets and the BFSI sector, developing a strong foundation in market reporting. She later moved to NDTV Profit, where she expanded her coverage across a wide range of business and economic stories.<br><br>At Mint, Subhana focuses on explaining central bank decisions, bond market movements, and banking trends for her readers. Her reporting combines on-ground inputs with careful analysis to help audiences understand complex financial developments.<br><br>Based in Mumbai, she is interested in exploring stories across the business landscape. Outside of work, she enjoys reading and spending time with her three cats.

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