Tamil Nadu - Madurai   

Majority of villagers still approach moneylenders for loans: RBI survey

MADURAI: A majority of villagers having zero-balance bank accounts still approach moneylenders for loans at high interests, a Reserve Bank of India-commissioned survey in the district has found.

Among those surveyed, nearly 65 per cent had not made even a single transaction using their bank accounts.

Only a small proportion of account holders was utilising banking services.

The study was aimed at understanding banking behaviour in rural areas and bankers’ perception on financial inclusion.

It found that location of the branches, complicated documentation, cumbersome procedures and lack of credit from formal sources were the main reasons that had driven villagers to moneylenders.

More than 60 per cent had opened bank accounts only to receive payments under government schemes. Instances of passbooks being kept at panchayat offices and bank communications sent to villagers in English also came to light.

There was also a feeling among villagers that they could not keep small amounts as savings in banks. Ninety-six per cent of those covered had the habit of saving, yet they preferred keeping the savings at homes.

If awareness about banking transaction was created among villagers, banks could get a huge increase in their customer and deposit base, the study opined.

The study also found that women were more interested in opening bank accounts for saving purpose.

The two-month study was carried out by a first year student of Bharathidasan Institute of Management (BIM) at Tiruchi, B. Chandrakumar, under the summer placement programme of the RBI. The respondents were chosen randomly from nine villages covered by six branches of public sector banks.

The report would be placed before RBI officials in Chennai by this month.

The important findings and recommendations were placed at a recent district-level review committee meeting chaired by Collector N. Mathivanan.

The meeting was attended by government officials and bankers.

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