The Hindu : Tamil Nadu / Madurai News : RBI directive to Lead Bank

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Monday, Sep 10, 2007
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Tamil Nadu

Tamil Nadu - Madurai

RBI directive to Lead Bank

R. Sairam

MADURAI: The Reserve Bank of India (RBI) has asked Lead Bank to carry out a survey in four districts in the State to find out if banks are in full compliance with its norms.

In the wake of complaints that banks were violating some of its provisions, the apex bank was prompted to take up this initiative, according to sources in the banking sector.

A meeting of top bank officials was convened by the RBI recently in Chennai, in which it laid down the parameters of the survey.

The four public sector banks which shoulder Lead Bank responsibility in Tamil Nadu — State Bank of India, Indian Overseas Bank, Canara Bank and Indian Bank — will conduct the survey in Tuticorin, Karur, Coimbatore and Krishnagiri respectively.

Responses are to be elicited from both banks and customers.The survey should be completed by November. .

Six areas

Branch managers will be quizzed on six areas: credit flow to small and medium enterprises (SME), credit flow to agriculture sector, banks’ adherence levels to Prime Minister’s 15-point programme for minorities welfare, simplification of procedures and processes for obtaining agriculture loans, one-time settlement scheme for small borrowal accounts and eligibility for fresh loans and relief measures extended to distressed farmers.

Quantum of loans

The Central Bank has also asked for quantum of loans disbursed to SMEs and also if collateral was being asked for loans up to Rs. 5 lakh, which would be in violation of its guidelines.

Customers will be asked if banks insist on collateral for loans for which RBI norms stipulating to the contrary exist and if adequate credit was being disbursed in time.

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