'Banks must cater to requirements of people'

By Our Staff Reporter

KOCHI, AUG. 26. Banks which do not cater to the financial requirements of the people will find the going tough, Prof. K.V. Thomas, Minister for Tourism and Fisheries, has said.

He was delivering the inaugural address at a customer meet held as a curtain raiser to the 24th national meeting of the State Bank of Travancore Employees Union. The Minister said that much needs to be done by banks in the fields of agriculture and small industries.

Customers aired their grievances like the difficulty in getting loans, poor customer service at some banks, etc. Apart from customers and bankers, there were representatives from the industry, agriculturists and businessmen.

Representatives of small-scale industries complained about the very low credit-deposit ratio of banks in the State. Mostly, it was people from other States who got the benefit of loans, from deposits made by Keralites. It is also common to demand 200 per cent collateral security on loans. The result is that those who have plans to start SSIs are discouraged. An entrepreneur involved in orchid cultivation, said that he was denied an agricultural loan after his plants got destroyed. The reason cited was that insurance cover was available only for property like buildings.

An NGO representative said the industries existing in the State were winding up and going outside because of the unwillingness of banks to grant loans. Major defaulters were being condoned and even given plum postings, whereas investors in SSIs were being targeted for recovery. Big businesses constitute 70 per cent of the defaulters. The attitude that investors in SSIs will not repay the loan amount has to change.

Another industrialist said bank staff were reluctant to grant loans, often citing one reason or the other, like inadequate staff, backlog of pending files, etc. This has to change and the loan scheme made attractive. It will help if customer meets are organised, at least on a quarterly basis. Bank managers have to be given more powers for sanctioning loans. The terms have to be made more liberal. It is difficult to understand how bank scams were happening despite strict regulations. The challenges thrown up by globalisation have to be overcome.

Customers were of the view that since agriculture is the spine of the economy, agricultural loans should be disbursed in an easy manner. Refinance should be given to people whose crops are destroyed because of Nature's fury. Unless there is an increase in agriculture output, it will be difficult to sustain the economy.

Mr. V.K. Ibrahim Kunju, MLA, said that crores of rupees that rich industrialists had borrowed from banks was being written off, but less fortunate borrowers were being made to cough up the full amount loaned.

Ms. Jameela Prakasan, AGM, SBT, said that the performance of `new generation private sector banks' has not been as high as expected. She also drew attention to the "bad condition" of the employees of these `hi-tech banks', adding that the banks would never become a threat to public sector banks.

The SIDBI representative said that the venture capital fund, set up in association with KSIDC, would do whatever is possible in meeting the requirements of small industrialists. The representative of the Lead Bank said that emphasis has to be given to agriculture and small scale industries, where loans can be given without collecting collateral security. Composite loans too can be given.

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