Online edition of India's National Newspaper
Friday, Jan 11, 2008
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Online edition of India's National Newspaper Friday, Jan 11, 2008 ePaper | Mobile/PDA Version |
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Tamil Nadu
KARUR: Banking circles in Karur district are aghast at the “indifferent” attitude of the new generation banks towards supporting poverty alleviation schemes and the “lukewarm” response in extending education loans to students from vulnerable areas. Repeated pleas by the district administration and banking regulators in the district have not yielded the desired results and the matter has been referred to the Reserve Bank of India besides planning to inform the State Level Banking Committee. ‘Slow in giving credit’The new age banks have been “rather slow” in extending credit flow to the priority sector and especially to the vulnerable poor in the peripherals of Karur such as Puliyur area. That has forced the public to only yearn for governmental support for specific schemes. For example, one person from Puliyur claimed with banking authorities here recently that he has been seeking to get loan under the Prime Minister’s Rozgar Yojana for the past several years in vain as his region is in the service area of a new generation private sector bank, although the District Industries Centre had short-listed him for extending credit to his bid to establish a loom. Similar was the bank’s attitude when some HIV-infected women sought to redeem their life with a small loan to buy milch animals. In case of education loans, during 2006-07, banks in Karur district disbursed a total of 655 loans of which only five were by the new generation banks. Similarly, during 2007-08, so far banks in the district have disbursed 580 education loans of which just three have been by the new generation banks. In case of PMRY, while public sector banks have so far sanctioned 480 loans only now the private sector new age banks have sanctioned a handful of loans and that too after much persuasion by the authorities. When asked, authorities at those banks cite reasons such as “absence of suitable product,” “absence of discretionary power to the branch head,” “inadequate security,” “poor documentation” in respect of poverty alleviation schemes besides invoking “inadequate financial status of the parents” in case of educational loans to students. All these have resulted in the public sector banks being forced to suffer additional burden. In case of priority sector lending, the new age banks in the district are disbursing loans mostly to big farmers who raise sugarcane but only after entering into a tie-up with private sugar mills on purchase assurance. Seek review
Banking monitoring officials in the district seek a thorough review of the situation and ensure increased participation of private sector new age banks in poverty alleviation and government sponsored programmes complying with Reserve Bank of India norms.
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