Chief Minister Siddaramaiah urged banks to formulate suitable growth strategies to support priority sectors of the government.
Inaugurating a State-level Bankers’ Committee’s convention at Vidhana Soudha here on Saturday, he said banks should not be conservative.
They should extend credit facilities to priority areas like primary education, agriculture and SC/STs as a social commitment to ensure that the targets are surpassed by a substantial margin, he added.
According to him, Karnataka is a cradle of five public sector banks, but the coverage has not resulted in an increased flow of credit.
“Tamil Nadu and Andhra Pradesh have maintained a credit deposit ratio of 117 per cent as against 75 per cent of the state,” he said.
He added that the State’s credit deposit has managed to cross 100 per cent as against Tamil Nadu’s 132 per cent and Andhra Pradesh’s 173 per cent.
Siddaramaiah said the interest subsidy claims have been settled at Rs 31.95 crore by the Agriculture Department and advised banks to be pro-active to benefit maximum farmers.
He observed that the progress in issuing Kissan Credit cards is as low as 7.98 lakh cards in 2012-13 as against the target of 11 lakh cards.
Regretting the low credit flow to the education sector by the State’s banks at Rs 4,263 crore, he said it was lower than Tamil Nadu and Kerala with Rs 11,894 crore and Rs 7,210 crore respectively.
Expressing concern over the negative growth in the housing loan segment, he said the government is looking forward to partner with banks.
Siddaramaiah said the Karnataka State Rural Livelihood Promotion Society, set up under the National Rural Livelihood Mission, is encouraging self-help groups (SHGs) with seven per cent aggregated loan amount up to Rs 3 lakh.
He said the State has been identified for additional interest subvention reducing effective rate of four per cent in prompt repayment of loans and wants to extend it to 26 districts.He said Karnataka disbursed Rs 5,181 crore to 4 lakh SHGs whereas Andhra Pradesh, with more than 10 lakh SHGs, gave out Rs15,000 crore.
‘Lend to Students’
Regional Director of Reserve Bank of India (RBI) Uma Shankar urged banks to set aside apprehensions and speed up the process of lending to people who need education loans to overcome lower achievement rates.
She said the banks are scared to lend loans to students and their parents.
“When you have Rs 2,000 crore loss in your books, why hesitate to risk Rs 5 lakh? How many such cases you have?” she asked.
She advised the banks to go slow and not jeopardise MSMEs.
She said the recovery in agriculture sector is 40 per cent and on tractors is at 30 per cent.
Uma Shankar said the banks need to help small-loan customers as they do in case of corporates.
Chief Secretary S V Ranganath also stressed the need to focus on lending priority sector.
Banks Told to Use Kannada
Chief Minister Siddaramaiah has directed banks to practice three language policy and use Kannada in their day-to-day activities.
He was addressing a State-level Bankers Committee Convention here on Saturday.
He said that the bank should print challans, pass books, loan applications, account opening forms and fixed deposit certificates in Kannada. Besides this, the banks should also use Kannada in their normal banking transactions, he noted.
He reiterated that the State government is firm on taking steps for implementing Kannada in all official activities.
He said that the government is committed to protect and encourage art and culture.
State government’s Chief Secretary S V Ranganath was present in the conference.