Banks should not buckle under pressure: FM

Finance minister P Chidambaram has asked banks not to buckle under political pressure while issuing loans.

Inaugurating the 179th branch of the Pandiyan Grrama Bank (PGB) on Friday, he said bank officials should weigh the merit of the case while sanctioning loans to the poor. Every customer should be treated equally, especially at a time when the government is keen on implementing financial inclusion in rural areas, he said.

PGB was constituted under the Regional Rural Bank Act with shareholders as Government of India, the Tamil Nadu government and the Indian Overseas Bank (IOB) in the ratio of 50:15:35.

Meanwhile, PGB would expand its operations in six more districts -- Tiruvarur, Thanjavur, Tiruchi, Theni, Nagapattinam and Perambalur-- from the present nine in the southern parts of Tamil Nadu.

It would open the 180th branch at Theni on December 31 while 4 more branches would come up before the end of this fiscal.

The bank has set a business target of Rs 2,500 crore in the current year with deposits of Rs 1,200 crore and advances of Rs 1,300 crore. Its net NPA stood at zero per cent and the credit deposit ratio at 103 per cent.

He said the bank would come out with plastic money by collaborating with the sponsor banks of IOB and VISA credit card besides international debit card before the end of this fiscal.

SA Bhat, CMD, IOB, said the bank had made history by providing financial assistance to over 20,000 women self-help groups.

He said the bank had also successfully introduced a scheme, "joint liability group" for the benefit of small traders and craftsmen and in the current fiscal alone had issued about 15,000 Kisan Credit cards with a credit limit of 27.46 crore.

Bhat also said that the RBI suggestion to waive inter bank waiver of charges on the use of inter bank ATMs charge is a welcome note.

"The implementation is necessary in the interest of the bank customers in general," he added.