Bank of India's third credit counselling centre in Chennai

Bank of India (BoI) has announced the launch of its third credit counselling centre in Chennai under a trust called 'Abhay', set up by the bank in August 2006.

BoI has contributed Rs 51 lakh towards the corpus of the trust and the first two centres have been set up in Mumbai and Wardha.

"Over 50 per cent of the rural population falls outside the purview of the financial system, while across the country, around 70 per cent of the population is beyond the banking system's purview. Credit counselling centres are present in developed countries, and with 'Abhay', we are trying to introduce this concept in India," said M Balakrishnan, chairman and managing director, BoI.

"Through the counselling centres, we aim to create awareness about financial management, enable easy access to finance to those outside the financial purview and also help people resolve their financial problems," he added.

The first two centres in Mumbai and Wardha have handled around 400 cases in the first four months of operations, he said.

"Most of the cases that we handled relate to credit card usage. A few bankers give credit to people without proper evaluation, while on the other hand, people get enticed by various marketing schemes and end up owning a number of credit cards. Due to this, many people get trapped in debt situations. Through our counselors, we aim to allay the problems of the many trapped in difficult financial situations," Balakrishnan said.

The credit counselling centres will function under the supervision of a governing council, which would have representatives from banks, eminent personalities and industry experts.