No collateral security for loans to SCs, STs
Finance Minister Pranab Mukherjee on Friday said banks had been asked to waive collateral security when they lend to borrowers from the Scheduled Castes, Scheduled Tribes communities. This was part of measures to grant easier access to credit to people from the oppressed class.
Replying to a question in the Lok Sabha, Mr. Mukherjee said the banks had also been instructed not to insist on guarantors for providing educational loans to students belonging to the weaker sections. There could be aberrations and the government would tackle them if they were brought to its notice.
Banks should not insist on deposits from borrowers of SC/ST communities while considering loan applications under government-sponsored poverty alleviation schemes/self-employment programmes. In case of rejection of loan applications of SC/ST, it should be done at the next higher level, instead of at the branch level, indicating proper reasons for rejection.
Of the total priority sector lending, a sub-target of 10 per cent had been fixed for weaker sections. Banks were being monitored as per these targets, but in some cases the banks failed to meet the targets and they had been asked to fulfil the objectives, he said.
Source : The Hindu Dt 12.03.2011
Finance Minister Pranab Mukherjee on Friday said banks had been asked to waive collateral security when they lend to borrowers from the Scheduled Castes, Scheduled Tribes communities. This was part of measures to grant easier access to credit to people from the oppressed class.
Replying to a question in the Lok Sabha, Mr. Mukherjee said the banks had also been instructed not to insist on guarantors for providing educational loans to students belonging to the weaker sections. There could be aberrations and the government would tackle them if they were brought to its notice.
Banks should not insist on deposits from borrowers of SC/ST communities while considering loan applications under government-sponsored poverty alleviation schemes/self-employment programmes. In case of rejection of loan applications of SC/ST, it should be done at the next higher level, instead of at the branch level, indicating proper reasons for rejection.
Of the total priority sector lending, a sub-target of 10 per cent had been fixed for weaker sections. Banks were being monitored as per these targets, but in some cases the banks failed to meet the targets and they had been asked to fulfil the objectives, he said.
Source : The Hindu Dt 12.03.2011
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