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Banks fail to meet minority lending targets

July 12, 2011 by  
Filed under India, newsletter-lead, Persecution

School Children forming Indian Rupee SymbolNew Delhi: Improving the socio-economic condition of minorities including those of Muslims, was one of the prominent agenda of UPA government after Sachar report highlighted their economic backwardness. But given the fact that almost half of the public sector banks failed to meet the prescribed lending targets, the government plan didn’t seem to be working.

By the end of March 2011 total lending in the private sector was worth Rs 10.13 lakh crore whereas loans given to the minority communities came around Rs 1.43 lakh crore.

The government had set the target of 15% by March 2011, as far as the share of lending to minorities in the private sector, which includes areas like agriculture, low-cost housing and small scale units, is concerned. But the share was raised by 14.16 %. The reason was that around 13 banks couldn’t meet the set target even though the same number of banks met the lending target.

The worst performer was IDBI Bank which dispensed loans worth around Rs 464 crore to the minority communities which was just 1.1% of the prescribed target. Bank executives consider the fact that the bank doesn’t have a strong branch network, to be the prominent reason for this worst show.

Other banks with extremely poor record of lending rates, below even 10%, till March 2011, are Bank of Maharashtra (4.17%), Corporation Bank (5.06%), State Bank of Bikaner & Jaipur (6.53%), Dena Bank (9.24%) and Vijaya Bank (9.62%).

Union Bank and Bank of Baroda which are considered to among the largest players, failed to miss the target with just 11.45% and 12.54% respectively. Other banks in the same category are Andhra Bank (11.31%), State Bank of Mysore (11.35%), Oriental Bank of Commerce (12.75%), State Bank of Hyderabad (14.5%) and Uco Bank (14.69%).

There are just two banks, Punjab & Sind Bank and State Bank of Travancore which have faired much better as compared to the above mentioned banks. Interestingly with 31.82% share of lending to minorities, Punjab & Sind Bank which always gets a Sikh chairman and which is not a good performer on other benchmarks, has the second highest percentage of lending to the minorities.

The best work has been done by State Bank of Travancore which dispensed around 34% loans to the minorities.

– md. ali, twocircles

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