Tamil Nadu - Erode   

Banks fail to deliver on social commitments

ERODE: Banks in the district, it appears, are out of sync with the textile industry and agriculture sector here, particularly so with the latter.

For a district like Erode, where agriculture is the predominant economic activity, banks have failed to disburse agriculture loan in good measure.

As per Reserve Bank of India guidelines, a bank’s lending to agriculture sector has to be at 18 per cent or above its advances in priority sector.

That is, if a bank has lent Rs. 100 under priority sector advances, it ought to have given at least Rs. 18 towards agriculture. In Erode, not many banks have followed the RBI’s stipulation.

The credit for such a performance goes to State Bank of Travancore, Allahabad Bank, Andhra Bank, Central Bank of India, Corporation Bank, Dena Bank, Punjab National Bank, Union Bank of India, UCO Bank, Vijaya Bank, Bank of Maharashtra, City Union Bank, Federal Bank, Karnataka Bank and ING-Vysya Bank.

In the aforementioned list, it bears mention that a good number of banks are public sector undertakings.

The other area where banks have failed is in taking care of the needs of the weaker sections of the society.

Again as per an RBI guideline, banks have to apportion at least 10 per cent of their priority sector advances for weaker sections, which includes small and marginal farmers, members of the Scheduled Castes and Scheduled Tribes, self help groups, artisan or cottage industry, among other things.

Banks that have found a mention for keeping their social responsibility include State Bank of Mysore, Allahabad Bank, Bank of Rajasthan, Catholic Syrian Bank, Bank of Maharashtra, City Union Bank, Dhanalakshmi Bank, Federal Bank, ICICI Bank, Lakshmi Vilas Bank and ING-Vysya Bank. Sources in the banking industry say it is up to the RBI to initiate action against the banks.

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