Private sector banks that have branches in the Northeast faced criticism from the industry for their alleged reluctance to lend to businesses in the region. Besides "engaging in retail activity", the industry alleged the role of private sector banks was "negligible" in the Northeast.
The Federation of Industry and Commerce of North Eastern Region (FINER), the premier trade and industry body of the Northeast, has requested the Reserve Bank of India (RBI) to ensure private sector banks shed their conservative attitude in the region.
"The role of private sector banks in the Northeast is negligible. These banks have plush branches, which are engaged in retail activity or raising deposits. Either no, or negligible, credit work is done in the branches. These banks include ICICI, HDFC Bank and Axis Bank, which are highly competitive in other parts of the country, but are reluctant to credit business in the northeastern region," FINER Chairman R S Joshi told RBI Governor D Subbarao, during the latter's two-day visit to Assam. "The industry in this region requires these banks to function with the same zeal and enthusiasm as that shown in other parts of the country," he added.
Joshi also requested the RBI Governor to ensure commercial banks appoint their best talents in this region to fill the talent gap. "There is a talent gap in the Northeast, which would take some time to be bridged. The best people would always perform, which can be seen from the way some banks like the State Bank of India has progressed in the region, by putting their best people here, even for short stints. The region lacks credit skills development and postings to the region may be taken as good career moves by the brightest amongst bank officers. The Northeast should not be a dumping ground or punishment postings for officers," said Joshi.
