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Jayalalithaa's call to bankers to expedite credit linkage to SHGs

Special Correspondent

Chief Minister seeks improvement of subsidy to credit ratio from 1:1.6 to 1:3

  • Government officers asked to work closely with bank managers
  • EDP training for 1.5 lakh women this year

    SPECIAL BANKERS MEET: T.S. Narayanaswamy, Chairman & Managing Director, Indian Overseas Bank, greetingChief Minister Jayalalithaa at the Secretariat in Chennai on Thursday. Others in the picture are: K.Gnanadesikan,Finance Secretary (second from left) and Dr.K.C. Chakravarthy, Chairman & Managing Director, Indian Bank(extreme right). - PHOTO: V. GANESAN

    CHENNAI: Chief Minister Jayalalithaa on Thursday stressed the need for streamlining of programme execution and elimination of constraints that hampered the formation of new self-help groups (SHG) and expediting their credit linkage, even while pleading for improvement of the subsidy to credit ratio from 1:1.6 to 1:3.

    Addressing the special bankers meeting, the first of its kind in the State at the Secretariat, she said, "Our endeavour should be to provide at least Rs.1,000 crores additionally as credit linkage to the SHGs in the current year."

    Referring to the Annual Credit Plan for the current financial year with an outlay of Rs.22,036 crores, which envisaged an outlay of Rs.12,345 crores for the farm sector, she said this had to be stepped up to ensure an increase of at least 30 per cent over the credit disbursement achieved last year.

    She called upon the bankers to extend their unstinted support to the State Government's World Bank-financed project, "PUDUVAZHVU," which "targets 3.5 lakh poor families in 70 blocks of the State." With an outlay of Rs. 717 crores, it would be implemented over a period of six years.

    The SHG movement in the State had successfully broken the hold of the pernicious "Kandhuvatti" system, besides giving hope to and shaping the lives of over 34 lakh women with savings of over Rs. 720 crores, she said adding the micro-credit programme had greatly helped banks to expand their base of creditworthy clients whose repayment rate had exceeded 98 per cent.

    "A recent study by the Reserve Bank of India indicated that the non-performing assets of banks pertaining to lending under the Swarnajayanthi Gram Swarozgar Yojana is the lowest in Tamil Nadu among all States at 0.53 per cent. With such an exemplary repayment track record of the SHGs, there was a strong case for further enhancing credit outlay for them, she said. Instructions had been given for the training of an additional 1.5 lakh women under the entrepreneurship development programme this year.

    Stating that several SHGs had not yet been able to access credit for economic activities, she asked the bankers to "treat this backlog as an unfinished task and work with single-minded devotion to credit-link these groups at the earliest."

    The Chief Minister suggested that restrictions such as the stipulation barring groups from availing themselves of assistance unless a minimum period of six months time had lapsed should be reviewed. She also pleaded for considering a shorter incubation period for well-formed SHGs, so that they could be assisted quickly to enable early access to revolving funds and credit assistance. The range of activities that could be financed needed to be innovatively expanded and the quantum of credit in project-based lending realistically assessed, she said.

    She asked the bankers to expedite sanction of the project cost in respect of 171 pending projects under the New Anna Marumalarchi Thittam. She also sought the cooperation of the bankers in implementing the Land purchase scheme for the dalits.

    Among others, N. Narayanan, Chief Secretary, K. Gnanadesikan, Finance Secretary; T.S. Narayanasami, Chairman and Managing Director (CMD), Indian Overseas Bank; K.C. Chakravarthy, CMD, Indian Bank; B. Swaminathan, Executive Director, Canara Bank; P. Choudhary, Chief General Manager (CGM), State Bank of India; F.R. Joseph, Regional Director, Reserve Bank of India; Prakash Bakshi, CGM, National Bank for Agriculture and Rural Development, participated in the meeting.

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