FM to meet PSU bank chiefs in Patna on Monday

Finance Minister Pranab Mukherjee will meet public sector bank chiefs in Patna on Monday as the government steps up efforts to spread banking services across remote districts of the country, reports Mahua Venkatesh.

Finance Minister Pranab Mukherjee will meet public sector bank chiefs in Patna on Monday as the government steps up efforts to spread banking services across remote districts of the country.

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All the chairpersons of public sector banks and chief ministers of some of the east Indian states are expected to attend the meeting.

The meeting would brainstorm on a host of issues, including enhancing credit flow for rural entrepreneurship, using banking network for the spread of the “aam admi bima yojana,” providing incentives to employees to serve in Naxal-affected areas and improving bank credit flow to farmers.

Mukherjee is specifically keen on enhancing bank financing under the Prime Minister’s Employment Generation Programme (PMEGP), a senior government official, who did not wish to be identified, said.

PMEGP is a credit-linked subsidy scheme administered by the Khadi and Village Industries Commission. Under the scheme, the government bears the burden of up to 25 per cent of the loan amount borrowed from a bank by a rural entrepreneur.

“Increasing credit flow through the PMEGP is a major item on the meeting’s agenda since the government is keen to generate employment in rural areas,” the official said.

Mukherjee will discuss the issue of using the network of state banks for implementing the “aam admi bima yojana.” It is a scheme for rural landless households, in which one member of the family is entitled to a Rs 30,000 life insurance cover. The states and the Centre equally share the Rs 200 premium.

The issue of providing incentives to bank employees in Naxal-affected areas would also be discussed, the official said. “Bank employees’ unions have made it clear that unless additional sops such as out-of-turn promotions and a maximum tenure of one year in these areas are fixed, employees would not be willing to serve.”

This meeting is a significant departure from normal practice where such meetings are usually held in Delhi or in the major metropolitan cities.

“The meeting will discuss various review parameters,” said T.M. Bhasin, chairman and managing director, Indian Bank.

The meeting will also debate on the steps taken to achieve the budgeted target of Rs 3,75,000 crore bank credit to farmers this year, Rs 50,000 crore more than last year.

A roadmap to ensure that every village with a population of more than 2,000 has a bank branch or a business correspondent — an authorised agent who can carry out banking activities on behalf of a bank — would also be discussed.