Monday, January 7, 2008

FM to tell banks by 2009-10 meet the target of minority lending

Finance Minister P Chidambaram, who will be presiding over a meeting of 28 public sector banks (PSBs) chiefs, is likely to ask them to accelerate steps for achieving the target of 15 per cent priority sector lending to the minorities by 2009-10.

In October last year the instructions were issued in this regard by the department of financial services, merely 19 banks have drafted a plan to achieve the target by March 2010.

By the starting of January 1, the country’s largest lender, the State Bank of India (SBI), had neither prepared any plan nor appointed a nodal officer to exclusively look into the problems of the minorities and ensure smooth credit flow to them.

Likewise, six other banks have yet to respond to the department’s query on the steps being taken to open more branches in 121 minority-concentrated districts. Five more banks are yet to respond to the department on the steps being taken to increase credit access to the minorities in these 121 districts.

Correspondingly, 21 public sector banks are to respond on the steps so far taken to create awareness of credit access to the minorities in the selected districts.

In the meantime, the ministry has asked the Reserve Bank of India to open a website to displaying data on credit given to the minorities.

Leading banks of the districts have been asked to supervise disposal of loan applications received from the minorities and provide reasons for rejections on a quarterly basis on the website.

The department has instructed the banks to set up special minority cells and designate a nodal officer to look after the problems of the minority communities.

It had also asked the banks to prepare handbook laying down specific state-wise annual targets over a period of three years to make sure that the overall level of priority sector lending to the minority communities is raised from the current level of 9 per cent to 15 per cent in 2009-10.

No comments: