Bank loans to minorities at all-time lown

HYDERABAD: Loans continue to evade minorities and figures show that less than Rs 14 crore of the earmarked Rs 32,219.85 crore priority sector lending (PSL) was disbursed to minority communities in FY 2012-13. Worse, the 46 banks of the State Level Bankers' Committee (SLBC) have recorded an abysmal consolidated minorities target achievement of 52%. "We have received serious complaints which have stated that banks are refusing to even let minority applicants open a bank account, leave alone grant loans to them. The AP State Minorities Finance Corporation (APSMFC) doesn't follow up on the loan applications with banks and the surplus money goes into fixed deposits which don't get disbursed, which is another problem," AP State Minorities Commission chairman Abid Rasool Khan told TOI. Despite all scheduled commercial banks being served a master circular by the Reserve Bank of India (RBI) last July, instructing them to boost PSL to minority communities based on the PM's 15-Point Programme for Welfare of Minorities, they have failed to comply. The SLBC report admits that banks were 'advised to ensure that lending to minority communities be given a thrust and banks should aim at achieving 15%of their priority sector lending to minority communities', It pegs its target achievement at a meagre 6.4 per cent. In what is reflective of poor grounding of loan applications routed through the APSMFC amounting to Rs 11.01 crore and AP State Christian Minorities Finance Corporation (APSCMFC) amounting to Rs 1.84 crore, 16 of the 46 SLBC banks have recorded a zero target achievement percentage. The non-performers include ICICI Bank, HDFC Bank and ING Vysya Bank, which were allotted an annual target of Rs 3 lakh, Rs 2.75 lakh and Rs 9 lakh respectively. Further, a staggering 32 banks have recorded a target achievement of less than 50 per cent which includes State Bank of Hyderabad (SBH) with a target achievement of a mere 47 per cent by disbursing Rs 1.34 crore. Banks in their defence say they often come across inadequate and improper documentation, which becomes difficult to issue loans. Also, many default on payments causing losses and forcing the institutions to implement a stringent process. Loan disbursement in FY 2012-13 in Hyderabad district was recorded at just 26 per cent with Rs 1.24 crore being given against an annual target of Rs 4.79 crore. This is only next to Karimnagar district which recorded 21 per cent meeting of targets with Rs 13.55 lakh being disbursed as against a target of Rs 65 lakh. "It is the same story every year with targets not being achieved. On the national level, the target achievement is around the 15 per cent mark. The problem lies in the fact that both private sector and cooperative banks' unwillingness to give loans to minorities," MLC Syed Amin-ul-Hasan Jafri told TOI on Wednesday. Source: TOI