RBI flays banks in MP

After coming down heavily on bankers in the state level bankers committee meeting here Reserve Bank of India today said technology in banking system is new and it would take time for bankers to function properly. Bankers in the state have performed very poorly in certain sectors like financial inclusion, distribution of kisan credit cards and education loans besides other social schemes.

Speaking to Business Standard, an RBI official said, “Bankers are assured of their salaries and they are lethargic in doing legitimate business. NBFCs, moneylenders and chit-fund are doing business because bankers have become vidharmi from their dharma (religion) of lending the money. Why bankers should fix a target of lending? Do they stop deposits if it is 100 per cent achieved? But it is not the only reason, technology is new for many bankers and it would take some time for the bankers to get used to the system, this scene is all over Madhya Pradesh and other states too.”

Bankers have a very poor performance in certain sectors like financial inclusion, education loan and other social security schemes.

On state government's complaint of low disbursement of education loans to deserving poor candidates, Chakrabarty warned the bankers that it was their collective responsibility to ensure quality education to deserving students.

"If you ensure loans to deserving poor, only then the society will have a future. They must understand."

A number of banks like Andhra Bank, Laxmi Vilas Bank, Kotak Mahindra Bank, Karur Vysya Bank and South Indian Bank figured with zero per cent achievement in the performance parameters under agriculture credit, MSE credit, other priority sector credit and total priority sector credit.

"I will put up the matter to the chairmen of the banks if they do not improve," said Chakrabarty. State principal secretary finance GP Singhal demanded immediate need to look into the decreasing performance of the bank in the education loan. As against the target of 150% during financial year 2010-11 the bankers achieved only 58% of the target in education loan.