PNB wants to break hold of moneylenders in North India

The farmers in Punjab and Haryana will now be able to break the cobweb of private moneylenders as the Punjab National Bank has aggressive plans for the financial inclusion of each village of the northern belt.

Talking to the media, the chairman and managing director of the bank, K C Chakrabarty, said that with the help of technology, the bank plans to make inroads into the rural market.

"Contrary to the presumption that rural borrowers default, the rich borrowers are recalcitrant. Future banking is mass market and a money lender is viable as the poor is credit worthy. Banks with optimum technology can replace the moneylenders," he said.

Punjab has a rural indebtedness of about Rs 5,700 crore and an average farmers' share of annual interest payment amounts to about Rs 11,000.

Punjab National Bank, in its capacity of being the leading bank in the state, has directed its branches in the region to cover the entire state by March 2008.

A special campaign for the education loan by the banks in the state would be taken up and shall be reviewed in the next state-level Bankers Committee meeting for the first time, Chakrabarty said.

Chakrabarty, who assumed the charge only last month, wants to leverage upon the extensive network the bank has in the Indo-Gangetic belt to reach out masses.

Besides this, the Farmers' Service Trusts, the exclusive entity of the bank would play a key role to mobilise potential rural customers for the financial inclusion.

He told Business Standard that the flow of the funds would be curtailed to the non-productive sectors like real estate and capital market and enhanced for the productive segments like agriculture, small and medium enterprises, education and self-help groups to achieve the objective of rural expansion.