Gandhi Co-op Bank forays into farm lending

The Gandhi Co-operative Urban Bank Limited, whose deposits rose to Rs 68 crore and advanced loans totalling Rs 49 crore during the first three quarters (April-December) of the current fiscal, has entered the farm lending sector this quarter.

The bank's chairman, V Basava Kutumba Rao, told Business Standard that the bank this quarter (January-March) is advancing loans to small farmers in villages surrounding the city.

He said that the bank stood by the policy of microlending, collecting deposits from and advancing loans to middle and low-income group people.

The bank is all set to do business over and above the deposit and loan targets (2004-05) of Rs 75 crore and Rs 49 crore respectively. Its net profit for the three quarters stood at Rs 1.5 crore. The bank's deposits, loans and net profit for the last fiscal stood at Rs 64 crore, Rs 45 crore and Rs 1.75 crore respectively.

The bank's depositors numbered 36,000 and the loan beneficiaries 12,000. Ninety per cent of the loans were given on house-pattas, which is a record of sorts and which even commercial banks do not have.

The rest is loaned to gold and other heads. Loans are given to 300 aspirants every month. Loans, ranging from Rs 10,000 to Rs 2.5 lakh, were given with clearance period ranging from 35 months to eight years.