FM to tell banks to meet minority lending target

Finance Minister P Chidambaram, who is chairing a meeting of 28 public sector banks (PSBs) chiefs, is likely to ask them to expedite steps for achieving the target of 15 per cent priority sector lending to the minorities by 2009-10.

Even though instructions have been issued in this regard in October by the department of financial services, only 19 banks have prepared a road map to achieve the target by March 2010.

As of January 1, the country's largest lender, the State Bank of India (SBI), had neither prepared a road map nor appointed a nodal officer to exclusively look into the problems of the minorities and ensure smooth credit flow to them.

Similarly, six banks are yet to respond to the department's query on the steps being taken to open more branches in 121 minority-concentrated districts. Five banks are yet to respond to the department on the steps taken to increase credit access to the minorities in these 121 districts.

Similarly, 21 public sector banks are yet to respond on the steps taken to create awareness of credit access to the minorities in the selected discticts.

Meanwhile, the ministry has requested the Reserve Bank of India to open a website to display data on credit given to the minorities.

Lead banks in districts have been asked to monitor disposal of loan applications received from the minorities and provide reasons for rejections on a quarterly basis on the website.

The department has asked the banks to set up special minority cells and designate a nodal officer to look after the problems of the minority communities.

It had also asked the banks to prepare a road map laying down specific state-wise annual targets over a period of three years to ensure that the overall level of priority sector lending to the minority communities is raised from the current level of 9 per cent to 15 per cent in 2009-10.