Cheque it out: Bihar Naxals turn bankers
A new set of rural bankers is emerging outside the jurisdiction of the Reserve Bank of India to provide hassle-free loans to the poor. Offer easy low interest loans using money from robberies and kidnappings, report Ramashankar & R.N. Sinha.india Updated: May 23, 2009 00:28 IST
A new set of rural bankers is emerging outside the jurisdiction of the Reserve Bank of India to provide hassle-free loans to the poor — ensuring no applications and no greasing of palms.
The new lenders do not charge interest on loans for marriages or for performing last rites. For higher education, the rate is two to four per cent, depending on the borrower’s economic condition.
But for investing in business, the rate is slightly higher but much less than the bank rates. The new banking system is being steadily built by the Communist Party of India (Maoist) in the areas under Tirhut division in north Bihar over the past year.
A committee set up by the party to approve the loan proposals has already granted loans to people in East and West Champaran, Sheohar, Sitamarhi and some parts of Muzaffarpur districts during the past year.
Asked where the money is coming from, a party source said bank robbery and kidnapping were easy ways to raise money.
He said the plan was to launch the system in 2006. But the arrest of some top leaders and the failure of a bank robbery attempt at Riga in Sitamarhi delayed the process.
“The idea behind a parallel banking system is to attract people towards the organisation and rid them of financial exploitation,” said the source, adding that it would widen the base of the organisation as the rural borrower normally had to pay 20 per cent of the loan amount as commission.
Admitted Satish Chandra Mishra, director of Uttar Bihar Gramin Bank, saying there were also instances of four or more members of a family getting loans on Kisan Credit Cards on a single plot of land.