Moneycontrol
Oct 10, 2017 04:16 PM IST | Source: Moneycontrol.com

Stand Up India fails to rise as only 6% of 1.3 lk bank branches lend to SC/ST borrowers

About 17 months later, records have shown that just six percent of the 1.3 lakh bank branches have given loans under the Stand Up India scheme to Scheduled Caste/Scheduled tribe individuals

Stand Up India fails to rise as only 6% of 1.3 lk bank branches lend to SC/ST borrowers

Moneycontrol News

The ambitious Stand Up India scheme launched by Prime Minister Modi in April 2016 to promote financial inclusion, has reportedly failed to gather steam. Seventeen months since, records suggest just six percent of the 1.3 lakh bank branches have given loans under the scheme to Scheduled Caste/Scheduled tribe individuals. Loans to women in the general category has also been provided by less than 25 percent of the branches.

Response to an Indian Express RTI filed with Department of Financial Services, Ministry of Finance, revealed that even Regional Rural banks have failed to uphold the scheme to provide required loans to people who need it.

No reasons were, however, made available on why the loans were denied by banks.

“The scheme will convert job-seekers into job creators. This scheme is going to transform the lives of people from Dalit and tribal communities. Stand up India aims to empower every Indian and enable them to stand on their own feet,” PM Modi had said in his Independence Day address in 2016.

The scheme requires every bank branch (wherever the branch) to ensure loans between Rs 10 lakh to Rs 1 crore to at least one SC or ST borrower and at least one woman per bank branch for setting up a greenfield venture. It also requires loans be given to any enterprise be it in the manufacturing, trading or services sector. Also, the loan — repayable in seven years — must be at the lowest applicable rate of the bank for its rating category.

According to the data, about 21 public sector commercial banks, 42 regional rural banks, and nine private sector banks have provided loans to only 5,852 SC applicants, 1,761 ST individuals, and 33,321 general category women. However, the total amount sanctioned across the banks is Rs 8,803 crore, of which only about 4,852 crore has been disbursed.

From the 42 RRBs, 15 banks have a given a loan to just 536 people – 97 SC persons, 32 in ST category 407 general category women.

The average amount disbursed to SC/ST applicants is Rs 10 lakh while the average for women is Rs 12.27 lakh.

While six public sector banks have together provided loans to less than 100 SC individuals, it is startling that 16 banks haven’t sanctioned a single loan under ST category.

Amongst the nine private banks, IndusInd bank has sanctioned 184 Stand Up India loans to SC individuals while only 12 loans have been provided to the rest. The nine banks together have sanctioned loans to 196 SC, 76 ST. Five of these nine private banks -  Axis Banks, Federal Bank, ICICI Bank, The Nainital Bank and Yes Bank – have not sanctioned a single such loan to any ST candidate.
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