The Hindu : Andhra Pradesh / Hyderabad News : YSR flays banks for thrusting insurance on SHGs

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Thursday, Nov 13, 2008
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Andhra Pradesh

Andhra Pradesh - Hyderabad

YSR flays banks for thrusting insurance on SHGs

Special Correspondent

SLBC convenor assures return of premiums in cases of forcible sale
Banks urged to be ready to disburse 1,600 cr. as sops to ryots for making regular repayments

HYDERABAD: Chief Minister Y. S. Rajasekhara Reddy has criticised banks for thrusting life insurance policies on those taking loans under Indira Kranthi Patham (IKP).

Addressing heads of all banks in the State at the mid-year review of the State-level Bankers’ Committee (SLBC) here on Wednesday, Dr. Reddy said that imposing insurance was against the instructions of the RBI. Besides, all the self-help group (SHG) members under urban and rural IKP were all adequately insured with nominal premium amount. In some cases, they were insured against the loans taken by them.

Return of premiums

Convener of the SLBC and chairman of Andhra Bank R.S. Reddy said that steps would be taken to return the premium amounts wherever such policies were sold forcibly.

The Chief Minister directed municipal authorities to clear the payments due to IKP groups, which contracted work from the civic bodies. He said that the total financial inclusion should be extended to all the eligible persons.

Referring to the SHG loans, Dr. Reddy said: “Some political parties are calling upon people not to pay their dues to banks, as they would waive them when they come to power.”

This was a bad trend. The State’s financial resources did not permit such a burden.

Debt-waiver was a one-time relief provided to farmers who suffered crop losses due to very low minimum support price for different crops and continuous droughts during the Telugu Desam regime in the State and NDA rule at the Centre.

The Chief Minister wanted the banks to fully gear up to distribute Rs. 1,600 crore being given by the State government to 32 lakh farmers as an incentive for making regular repayments. He urged bankers to bring online all the dormant government accounts to unlock the resources. Ministers K. Rosaiah, Botsa Satyanarayana, G. Chinna Reddy, Md. Fareeduddin, and senior officials of the government and banks participated.

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