Panel to submit report on alternative banking next month

The independent commission on alternative banking and financial policy, set up by the All India Bank Officers' Confederation (AIBOC), will submit its report in the middle of next month.

This comprehensive report would be a viable alternative to the current reforms in the financial sector, which has failed to fulfil the aspirations and expectations of the common man, Shantha Raju, general secretary, AIBOC, told mediapersons here on Monday.

The impact of liberalisation and the government's move to privatise public sector banks have adversely affected the credit dispensation to the rural population, in particular the agricultural and allied activities, he said.

The changes brought about as recommended by the Basel Commission making it obligatory on the part of each branch of a bank to make profit have slowed down the credit outlay in rural areas of the country.

The dilution of the definition of priority sector lending, which was basically meant to accelerate growth in agriculture and small-scale industry, has resulted in mere statistical fulfillment of priority lending. And because of this, the credit requirement of farmers are not being fully met, he said.

The credit to agriculture sector has come down from the targeted level of 18 per cent to 9 per cent, he pointed. Raju said AIBOC was against privatisation of public sector banks.

The country needs the services of public sector banks and the savings mobilised through deposits account for more than 60 per cent of the GDP, he said, adding that the funds so mobilised should be made available for the development and welfare of people.