Be Friendly With Fleet Operators, Iba Tells Banks

The commercial banks should adopt a more customer-friendly approach as far as the lending to the commercial vehicle operators concerned, suggested Indian Banks' Association (IBA) in a report submitted to the ministry of finance.

IBA was given the charge of doing a review of the banks' financing of commercial vehicle operators both directly and through non-banking finance companies (NBFCs) by the Ministry of Finance. The review was done by a working group constituted by the association under the chairmanship of RV Shastri, chairman & and managing director Canara Bank.

The working group has observed that the NBFCs through their network in rural and semi urban centres play an important role in supporting transport operators. NBFCs has also good performance as far as the recovery of advances to the commercial vehicle operators are concerned. Considering the banks-NBFCs linkages in the commercial vehicle financing the group has recommended that banks should adopt a more sympathetic approach towards meeting working capital requirements of the banks. The group has also observed that there is an established market for second hand vehicles which requires banks' support as well.

Mahesh Thakkar, executive director, association of leasing and the financial services said that the association along with the commercial vehicle companies approached the ministry of finance couple of months back. The presentation made by them highlighted the dip in the commercial vehicle sales in the current financial year and argued that the availability of finance is the main reason for that.