PMRY loans see over 50% default

While the government is stressing on the need for the speedy disbursal of loans under the Prime Minister's Rozgar Yojana (PMRY) scheme, the data provided by some of the leading banks show that more than 50 per cent of the loans are in the hands of defaulters.

In Gujarat, the government has set a target of disbursing PMRY loans to 13,000 people for 2003-04.

Till June 2003, only 936 cases were sanctioned amounting to Rs 4.85 crore and more than 3,500 applications were pending.

Bank of Baroda, one of the leading banks of the state, has set a target of 2,600 cases to be disbursed under PMRY scheme for 2003-04, while it has received only 1,500 applications, out of which 658 cases were sanctioned totalling Rs 3.15 crore.

Of the sanctioned 658 cases, only 536 cases were disbursed, amounting to Rs 2.48 crore.

The bank has returned 447 applications for lack of proper documentation and 412 cases are still pending.

So far, the bank has sanctioned more than 2,500 cases totalling Rs 14 crore and more than 1,000 applicants turned out to be defaulters, leaving a due of Rs six crore.

The bank's recovery rate stands at 55 per cent a senior official of the bank said.

S P Agarwal, deputy general manager, north Gujarat zone, Bank Of Baroda, said, "Most of the people who take loans under PMRY scheme are untrained and not serious about the project because of government subsidy. Viability of the project is another important aspect that is ignored by most of the applicants."

State Bank of India was given a target of 2,000 cases to be disbursed under the PMRY scheme by the government for 2003-04, while it has received only 781 applications, totaling to Rs 2.73 crore.

A total of 535 cases amounting to Rs 1.94 crore were sanctioned, 90 cases were rejected and 156 cases are still pending.

The banks need to scrutinise all the applications forwarded by the District Information Centre.

"Recovery rate of the bank stands at around 50 per cent. Notice is issued to most of the defaulters.

Even a grace period is given for repayment. Most of the defaulters are inexperienced," said Mohan Patel, assistant general manager, business planner division (development banking), State Bank of India.