Government and banks cannot have different policies: Minister

Asserting that all sections of society were creditworthy and entitled to get bank loans, Union Finance Minister P.Chidambaram has said the banks were obliged to follow the policy of the government.

Speaking after opening the 3,000th branch of Indian Overseas Bank (IOB) at Vaniankudi near here on Saturday, he said, “Every bank is obliged to follow the policy of the government and every bank manager is obliged to follow the policy of the government and the bank.”

The government and the banks could not have different policies, he said and urged the banks to reach out to the public and provide banking services on their doorstep. Justifying opening of more bank branches, he said opening of bank branches was the true indicator of development.

One could not provide medical service without opening hospitals and education without opening schools, and similarly, banking services could not be provided to the people without opening bank branches, Mr.Chidambaram said.

He said in the earlier days, banks were catering to the needs of only rich people as they were functioning as business centres for the rich. Poor people and those who could not afford to wear a white shirt and footwear could not imagine entering into the banks.

“We have changed the attitude of the banks now,” Mr.Chidambaram said, adding banks had started providing credit access to a cross section of the people, including women self-help groups, first generation entrepreneurs, youths, students and differently-abled people. All those who had the capacity to repay the loan were creditworthy, he said.

The opening of 3,000 branches by the IOB was an extraordinary achievement, Mr.Chidambaram said. While it took 73 years for the bank to come out with 2,000 branches, it had opened another 1,000 branches in just four years, he said.

The bank would take another two to two and a half years to open another 1,000 branches, he said and congratulated M.Narendra, Chairman and Managing Director, for opening 1,000 branches after assuming office in November, 2010.

Mr.Narendra said the bank had a business mix of Rs.3.67 lakh crore – Rs.1,600 crore of which is in Sivaganga district. All over the country, the IOB had more than 3,500 business correspondents covering 2,901 villages, he said.