You are here: Home » Current Affairs » News » National
Business Standard

Govt pushes state-run banks to step up loans to street vendors: Report

Banks in Madhya Pradesh are scrambling to boost lending to street vendors in a bid to bolster numbers ahead of a visit this week by Prime Minister Narendra Modi

Banks | Street vendors | Madhya Pradesh

Reuters  |  MUMBAI 

gdp, growth, forecast, profit, economy, bank

By Nupur Anand

MUMBAI (Reuters) - in are scrambling to boost lending to in a bid to bolster numbers ahead of a visit this week by Prime Minister Narendra Modi, according to sources and letters seen by Reuters.

A scheme that is part of a coronavirus relief package launched this year offers collateral-free loans of 10,000 rupees ($136.13) to help an estimated 5 million street vendors, but state-run mired in bad debt have been hesitant to lend.

"All bank branches in the state need to immediately accept all applications submitted under the street vendor scheme and disburse loans without delay," the Bank of India told some senior employees in a letter, in light of Modi's visit.

Reuters reviewed similar memorandums and emails sent by Central Bank of India and Punjab & Sind Bank to employees in Madhya Pradesh, ordering them to sanction and disburse loans by Tuesday.

The prime minister's office, the finance ministry, the Bank of India, the Central Bank of India and the Punjab & Sind Bank did not immediately respond to requests for comment.

Several branches of state-run were open on Sunday to distribute loans, according to one banker and an email seen by Reuters.

Bankers have also been warned of penalties if targets are not met, said two sources who spoke on condition of anonymity.

"There is so much pressure from the government and senior management to sanction these loans right now that the due diligence process has gone for a toss," said one banker at a state-run bank.

Modi is expected to announce an infrastructure spending push in before dates for by-elections to 27 state assembly constituencies are set by India's Election Commission.

He is also expected to meet beneficiaries of the street vendor loan scheme, said a news website, the Print.

On Monday, India surpassed Brazil to become the nation with the largest number of infections, except for the United States, with a tally of 4.28 million.

Its economy shrank 23.9% in the quarter from April to June, in a sign that recovery could be longer than expected.


(Interactive graphic tracking global spread of coronavirus: open in an external browser.)


(Reporting by Nupur Anand; Editing by Clarence Fernandez)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Tue, September 08 2020. 18:22 IST