Money & Banking
Banks should look beyond 'Gang of 4' to promote women SHGs: Ramesh

According to the Rural Development Minister, about 80% of bank lending for self help group today goes to the gang of four--Andhra Pradesh, Tamil Nadu, Karnataka and Kerala and the government is facing huge challenge of increasing the SHGs in northern and eastern parts of India

 
New Delhi: Noting that a major chunk of bank lending for women self help groups (SHGs) goes to four south Indian states, Rural Development Minister Jairam Ramesh has said banks can help raise the number of such outfits in the north and east Indian states to promote social development there, reports PTI.
 
"80% of bank lending for self help group goes today to the gang of four--Andhra Pradesh, Tamil Nadu, Karnataka and Kerala. Now we are facing huge challenge of increasing the self-help groups in northern and eastern parts of India," Ramesh said noting that banks in north and eastern Indian states are a laggard lot in extending credit to such initiatives.
 
Addressing a function "NABARD award for rural innovations 2012", the Minister said the Rural Development Ministry is working very closely with NABARD, an apex development bank with a mandate for facilitating credit flow for promotion and development of rural agriculture and village industries, for increasing the self-help groups in northern and eastern Indian states.
 
"I am hopeful that very soon the type of success we witness in south India will be visible in states like Bihar, Orissa, Madhya Pradesh," he said seeking the help of Finance Minister P Chidambaram, who was chief guest at the programme, to address the biggest constraint of SHGs' linkage with banks in these states.
 
Ramesh, who is also the Minister for Drinking Water and Sanitation, also pitched for NABARD like agencies role to support the Government's mission to promote sanitation in rural areas.
 
"Innovation is needed in the area of sanitation. This is an area we need more attention. 60 percent of rural women lack toilet facilities," he said.
 

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RBI amends priority sector lending norms

RBI said banks should ensure that loans extended under priority sector are for approved purposes and the end use is continuously monitored

 
Mumbai: The Reserve Bank of India (RBI) has expanded the priority sector lending in agriculture, housing and small and medium enterprises (SME) to widen the scope loans to these sectors, reports PTI.
 
"...discussions were held with CMD/CEOs of select banks and also with priority sector heads of select banks. Based on the feedback received, it has been decided to make certain additions and amendments in the guidelines on priority sector," RBI said in a notification today.
 
RBI said lending by banks to corporates, including farmers' producer companies of individual farmers, partnership firms and co-operatives of farmers in agriculture and allied activities -- dairy, fishery, animal husbandry, poultry, bee-keeping, and sericulture -- up to an aggregate limit of Rs2 crore would qualify for priority sector lending.
 
This kind of lending could be for the purpose of raising crops, pre-harvest and post-harvest activities (spraying, weeding, harvesting, grading, sorting) and export credit for exporting their own farm produce, it said.
 
In case the loan limit per borrower is more than Rs2 crore, the entire loan should be treated as indirect finance to agriculture, it added.
 
Also, bank loans to (MSE) engaged in providing or rendering of services would be eligible for direct finance under priority sector up to an aggregate limit of Rs2 crore per borrower/unit.
 
Loans to governmental agency for construction of dwelling units or for slum clearance and rehabilitation of slum dwellers up to Rs10 lakh per dwelling unit would come under priority sector.
 
Loans to economically weaker sections and low-income groups, loans to housing finance companies for refinance, on-lending for purchase or construction or reconstruction up to a ceiling of Rs10 lakh per dwelling would also be eligible for priority sector lending.
 
RBI further clarified "banks should ensure that loans extended under priority sector are for approved purposes and the end use is continuously monitored. The banks should put in place proper internal controls and systems in this regard." 
 
The central bank has mandated targets for priority sector lending to meet credit needs of large sections of population who had no access to institutional finance.
 

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Bank credit, deposits grow by 14-16% in past 12 months: RBI

According to RBI data, bank deposits rose 13.8% to Rs64.1 lakh crore while credit grew 15.8% to Rs48.1 lakh crore in the past 12 months

 
Mumbai: Bank credit and deposits grew by 14-16% in the past 12 months, data from the Reserve Bank of India (RBI) showed, reports PTI.
 
RBI releases banks' statement of position data fortnightly and data released yesterday stated the position till 5 October 2012.
 
According to the data, banks' deposits were at Rs64.1 lakh crore as of 5th October 5, up 13.8% from Rs56.3 lakh crore a year ago.
 
Bank credit grew to Rs48.1 lakh crore, up 15.8% from Rs41.5 lakh crore as of 7 October 2011.
 
The investment by the banks in government securities and other approved securities rose to Rs20 lak crore, up from Rs17.4 lakh crore a year earlier.
 
Also, the food credit outstanding by banks (including state co-operative banks) stood at Rs99,915 crore from Rs69,640 crore.
 

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