Govt ups loan target for minorities
Under the government’s plan to help underprivileged, public sector banks have targets for loans to be extended to minorities – and the banks missed their mark in the 2008-09 financial year. Mahua Venkatesh reports.business Updated: Jun 25, 2009 23:06 IST
Under the government’s plan to help underprivileged, public sector banks have targets for loans to be extended to minorities – and the banks missed their mark in the 2008-09 financial year.
The government had set the target for at 13 per cent of the total priority sector advances, but the total outstanding loans to minority communities stood at Rs 82,865 crore at the end of last March —12.4 per cent of the total priority sector advances.
The lending to Sikhs, Muslims, Christians, Zoroastrians and Buddhists — notified as minorities for lending purposes — figures in the performance appraisals of public sector bank chiefs.
Though the latest slippage is marginal, concerned finance ministry officials have moved to raise the target to 15 per cent of priority sector advances in the current year. A government source said the issue has also been taken up with the ministry of minority affairs.
The UPA government directed banks to enhance financial assistance to minority communities in 2007 in the wake of Sachar Committee report, which highlighted the dismal socioeconomic state of the Muslims in the country.
In October 2007 lending by state run banks to minority community stood at 9 per cent.
“Keeping in view the priority assigned to lending to minority communities, the banks should ensure that minority community lending to the extent of 15 per cent of priority sector lending is achieved during the year,” an official note sent to the banks said.
MD Mallya, chairman and managing director, Bank of Baroda said his bank was “endeavouring to reach the set target.”
SK Goel, chairman and managing director, UCO Bank was confident. “There is no problem and we will be touch the set target for the current fiscal,” he said.