Southern states want more leeway from PSU banks

The finance ministers and chief ministers of the four southern states have told Union Finance Minister P Chidambaram that there should be more leeway from public sector banks in terms of collateral for priority sector lending.

In a meeting with Chidambaram and heads of PSU banks here on Tuesday, the leaders said there had been a good uptake in credit growth for the priority sector, but much more could be done if PSU banks reduce the collateral requirement.

Karnataka Chief Minister Jagadish Shettar, Andhra Pradesh CM Kiran Kumar Reddy and Puducherry CM N Rangasamy attended the meeting, while Tamil Nadu and Kerala were represented by their finance ministers, O Panneerselvam and K M Mani, respectively.

According to sources, Chidambaram has urged banks to look into this request. He also said, “In terms of agriculture credit, education loans, and SME credit, there is a good growth in southern states, compared with certain other states.”