Tracking Funds: SBI Chair CS Setty Calls for Market Infrastructure Overhaul

SBI chairman CS Setty urges for a new institution to monitor the use of borrowed and equity funds by small businesses. He emphasizes creating mechanisms to ensure funds are used as intended, with a focus on enhancing investor confidence and competitive pricing. He also highlights MSMEs funding challenges.

State Bank of India's chairman CS Setty has proposed the establishment of a market infrastructure institution to ensure transparency in the end-use of funds borrowed or obtained as equity by small businesses. His statement comes amid rising concerns over the correct utilization of financial resources.

Setty highlighted the necessity of a 'viable mechanism' to track these funds, suggesting a separate institution with the authority to monitor fund usage. He addressed a Sebi-promoted NISM conference, emphasizing that such measures would reassure investors and sharpen competitive pricing.

Noting recent directives from the Reserve Bank of India, Setty stressed the importance of ensuring youth-sourced capital doesn't end up in risky market segments, an issue seen in recent years. He projected an 8-9% GDP growth until 2036 to achieve a developed India by 2047, underlining the need for enhanced domestic savings and a robust capital market.

(With inputs from agencies.)