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BJP’s Tamil Nadu unit launches helpline to obtain loans

Up to 19,000 people have applied for loans, five applications have been processed and Rs 20 lakh loans was released, according to the party website. Moves comes as as Rs 3 lakh crore MSME loan scheme has failed to take off.

June 19, 2020 / 03:28 PM IST

The Tamil Nadu unit of the Bhartiya Janata Party (BJP) has launched a helpline to support applicants secure a bank loan under various government schemes, arguably the first occasion a political outfit is openly intervening in the lending activity of financial institutions.

The BJP unit published details of the helpline on its website

“Once you have registered, upload the requisite details on the site. Our administrators will contact you soon and help you obtain a bank loan,” the website says.

The promise of loans by BJP comes in the backdrop of the poor response to the Rs 3 lakh crore MSME loan scheme launched by the central government.

State-run banks, which are under heavy pressure to disburse loans, have distributed only Rs 18,306 crore against the sanctioned amount of Rs 36,486 crore until June 16. The sanctioned amount is roughly 12 percent of the total scheme mount of Rs 3 lakh crore and the disbursed amount only about 6 percent.


But political intervention and micromanagement in the business of banks have long been cited as a big reason for the bad loan mess in the banking sector. About 60 percent of India’s banking system by assets is controlled by government banks.

The ‘Bank Loan BJP Helpline was launched on June 8, 2020 by Tamil Nadu BJP President L Murugan. According to the details on the site, those who wish to get bank loan have to register their details on the website. BJP leaders will then directly contact them in person and do the needful.  The BJP unit has also formed a committee comprising retired bank officers. The committee will be headed by one retired bank managing director.

Suba Nagarajan, BJP’s Tamil Nadu State Vice President, confirmed that loans will be made available through this website for applicants. “Our president L Murugan launched this platform. Loans for agriculture and small businesses will be made available,” Nagarajan told Moneycontrol.

Want a loan?

“Are you looking for a bank loan to start your enterprise or pursue a business? TN BJP has stepped in to help meritorious persons of Tamil Nadu get a bank loan directly, without paying intermediaries or brokers,” the website says.

According to the website, 19,000 people have applied for loans, five applications have been processed and Rs 20 lakh loans was released.

It is not clear how the BJP unit assures loans to borrowers. Borrowers can directly approach all PSU banks to avail the loan facilities under various government schemes, including the recently launched Rs 3 lakh crore micro, small and medium enterprises (MSME) loan scheme.

“The question of an intermediary or broker doesn’t arise. Borrowers can directly approach banks,” said CH Venkatachalam, general secretary of All India Bank Employees Association. “It is up to the banks to decide whether a borrower is eligible for a loan. What is the role of a political party in this?”

In the past, politicians have intervened in bank loan process under schemes like Mudra, Venkatachalam added. "Such intervention from the BJP has happened in the past too. The finance ministry needs to urgently intervene and address this issue," Venkatachalam said.

Poor response to MSME loan scheme

Among the public sector banks, State Bank of India (SBI), the country’s top lender by assets, has sanctioned the most MSME loans until June 16, at Rs 15,317 crore. Against this, the bank has disbursed Rs 9,489 crore loans. SBI disbursed this amount to 91690 accounts.

Bank of Baroda comes second in the charts, sanctioning Rs 4,560 crore loans of which Rs 1,255 crore has been disbursed. Canara Bank has cumulatively sanctioned Rs 3,683 crore loans of which disbursed amount is Rs 1,619 crore loans. Punjab National Bank has cumulatively sanctioned Rs 3,371 crore loans of which Rs 1,187 crore has been disbursed.

Under the scheme, existing MSME borrowers of PSBs can get additional funds of up to 20 percent of their loan outstanding as on February 29. The government will provide complete guarantee to banks on these loans including the interest amount. This was announced as part of the Rs 20 lakh crore economic package to fight COVID-19 induced economic slowdown.

Besides, the government had also launched a Rs 5,000 crore street vendor loan scheme guaranteed by the government and a Rs 2 lakh crore concessional credit scheme for farmers. These are some of the measures announced as part of the Rs 20 lakh crore package.
Dinesh Unnikrishnan
first published: Jun 19, 2020 03:28 pm

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