Step up lending in minority-dominated areas: govt to banks

With most banks falling short of their lending targets to minorities, the government has reportedly asked banks to step up lending to such sections, especially in districts dominated by such communities.

Banks including Bank of Maharashtra, Corporation Bank, Union Bank of India, IDBI Bank and State Bank of Bikaner and Jaipur have not managed to lend over 10% of the total priority sector lending to minorities.

The issue was raised during a recent meeting held by finance minister P Chidambaram with bank chiefs. Chidambaram, however, said that banks have overall been able to meet the set target and he was happy with their performance.

“Most banks barring a few have met the targets but the problem is that minority-dominated areas still need to be brought into focus and it has been discussed that those districts that are identified need to be given special attention,” a public sector bank chairman told HT.

The Prime Minister’s new 15-point programme for the welfare of minorities announced in 2006, underlined the need to improve the conditions of living of minorities while ensuring their fair and appropriate share in economic activities and employment of the country. It also emphasised enhancement of credit support to minority communities for self employment while generating opportunities.

Lending to minority communities is part of the priority sector lending. All domestic scheduled commercial banks are statutorily required to lend 40% of their total loans to priority sector, including agriculture, small scale industries, weaker sections etc.

The lack of awareness among the weaker section of the minority communities have also hindered the growth in the lending pattern, said bankers. “This is an issue and we need to address that, often there are no takers for such loans and it is not feasible for banks to always go looking for prospective borrowers, though we do that,” a senior bank executive said.