in 74199 villages across the various states in the country. this comprises of 2493 branches, 69374 business correspondents and 2332 other modes like rural atms, mobile vans, etc. the process for ensuring coverage of villages with population below 2000 is underway. bis central bankers ’ speeches to ensure enhanced credit flow to the sector, in terms of the recommendations of the prime minister ’ s task force on msmes constituted by the government of india, banks were advised to achieve a 20 per cent year - on - year growth in credit to micro and small enterprises ; with allocation of 60 % of the mse advances to micro enterprises, which is to be achieved in stages viz. 50 % in the year 2010 – 11, 55 % in the year 2011 – 12 and 60 % in the year 2012 – 13 and achieve a 10 % annual growth in number of micro enterprise accounts. the reserve bank is closely monitoring the achievement of targets by banks on a quarterly basis. the matter is followed up with the laggard banks to know their constraints and impress upon them the need to devise strategies to gear up the credit mechanism for the sector. as the mse borrowers, especially new generation entrepreneurs, do not have collaterals to offer to avail of bank finance, we have, in terms of the recommendations of the working group constituted by the reserve bank of india to review the credit guarantee scheme ( cgs ) of the credit guarantee fund trust for micro and small enterprises ( cgtmse ), mandated banks, on may 6, 2010, to provide collateral free loans to the mse sector up to rs. 10 lakh, which was increased from rs. 5 lakh earlier and the banks, in turn, could take cover for the collateral free credit facilities under cgs. all scheduled commercial banks have also been advised on may 4, 2009, to review and put in place an mse loan policy, restructuring / rehabilitation policy and non - discretionary one time settlement scheme for recovery of non - performing loans, duly approved by their board of directors. banks were advised in december 2009 to give wide publicity to the non - discretionary one time settlement scheme for recovery of non - performing loans for the mse sector by placing it on their website and through other possible modes of dissemination. to address the complaints received from various industry associations / chambers that banks are not acknowledging their loan applications, we have, on january 4, 2012, mandated banks to acknowledge all loan applications, submitted manually or

also aids financial stability by spreading credit risks across the economy and thereby shielding the banking sectors in times of stress. further, a well - developed bond market can also help banks raise funds to strengthen their balance - sheets. viewed in the above context, a vibrant debt market is critical to meet the funding requirement for infrastructure sector. hence, going forward, there is a need to increase the reliance on the corporate bond financing so as to reduce macro - economic vulnerability to shocks and mitigate systemic risks. development of municipal bond market according to the high powered expert group committee ( chairperson : dr. isher judge ahluwalia ) india will need to invest ₹39, 187 billion between 2012 and 2031 to meet its urban infrastructure requirements. municipal bonds could be an important source of financing this requirement. since 1997, only 25 municipal bond issues have taken place in india mobilising only ₹14 billion. an active corporate bond market could enable market for municipal bonds issued by the urban local bodies ( ulbs ). in this context, a world bank study ( october 2011 ) on “ developing a regulatory frame work for municipal borrowing in india ” has focused on such bonds. keeping in view sustainability it has recommended that there should be interest cap on such bonds and they should be treated as tax - free bonds in the same manner as other tax free instruments. the study has also recommended that a new asset class called “ rated municipal securities ” needs to be added instead of “ non - government securities ” to both the irda and the pension fund regulatory and development authority ’ s ( pfrda ) investment guidelines. b. growth of indian debt market recommendations of various committees have been implemented by the respective regulators to promote debt market in india. the growth of corporate bond market in india has been aided by existence of a well - developed g - sec market which provides a benchmark yield curve for bond pricing, a well - functioning depository system, credible system of rating agencies and adequate legal framework. measures, such as, rationalising the listing norms, standardisation of market conventions, reduction in the shut period, setting up of reporting platforms, and implementation of dvp settlement of corporate bond trades have had an bis central bankers ’ speeches encouraging impact on the market resulting in considerable increase in issuance as well as secondary market trading of corporate bonds. total issuance has increased from ₹1, 747. 81 billion in 2008 – 09 to ₹2, 968. 94 billion in 2011 – 12. similarly trade volume has increased