Andhra Pradesh Chief Minister Y S Rajasekhara Reddy has asked bankers not to encourage micro finance institutions (MFIs) "as they are charging astronomical interest rates."Addressing the state-level bankers committee (SLBC) meeting here on Monday, the Chief Minister said some of the founders of MFIs were leading a luxurious life at the cost of the poor. He, however, said those who have taken loans from the MFIs should be persuaded to pay back at least at reduced interest rates.The Chief Minister also wanted the committee, set up to examine the activities of MFIs in the state, to submit its report as soon as possible.Launching the State Credit Plan 2006-07 earlier, he asked the SLBC members to disburse agricultural loans without any delay as monsoons were expected to be good even this year.The Chief Minister agreed to the request made by Andhra Bank chairman and managing director K Ramakrishnan for setting up a state-level training institute for the members of self-help groups (SHGs) for capacity building.In his welcome address, Ramakrishnan suggested setting up of the institute with an initial investment of Rs 5 crore. He wanted the state government and the National Bank for Agriculture and Rural Development to bear 25% of the cost each, while the remaining 50% could be borne by five lead banks in the state - State Bank of India, State Bank of Hyderabad, Andhra Bank, Syndicate Bank and Indian Bank.Ramakrishnan also wanted the state government to allot 25 acres of land to the institute around Hyderabad free of cost. The Chief Minister agreed to the proposal.
