Govt. must ban PSU bank ads with the PM/FM letters and photos! Farm debt write-offs should be followed by sustained farm credit systems. A PSU bank celebrating 100 years or some such events using the PM/FM letters and photos on full pages in all national dailies must have costed the bank several lakhs of rupees!

Yet, now we see the practice by the PSU banks using the incumbent Prime Minister and the Finance Minister photos for promoting, for all practical purposes, the incumbent chairman’s tenure only! This is, in our opinion, an obnoxious practice. This practice to waste public funds and also deploy the bank machinery to promote the short-lived tenures of the job holders has to be ended. These ads came on the day when the Karnataka government was conducting the krishipandita awards to  farmers who have successfully done so many innovative technologies to raise farm productivity as well as to promote the environment was heart-warming and also the PSU bank’s splashing of public funds very heart-breaking.

Somehow, the public perception of the public sector banks in serving the larger public purposes, be it reaching out to the needy farmers or the very many socially laudable purposes, be it self-help groups or innovative lending, banks have become very insensitive institutions, lately.
We don’t have such innovative pioneers like the late TMA/TA Pais or Sunderram Shettys or even the original founders who built up these institutions with meager funds but with remarkable will of steel!

Half the rural Indians do not have the means to borrow from banks, have no access or have no capacity to borrow. They are so poor. It is for this sector that the co-operative banks were conceived. But what a state the co-op credit sector had fallen. Also farming is very difficult in many cases, more so in unirrigated lands. Says Nabard chairman, the new one Mr.YSP Thorat. He is reported to have observed that rural credit accounts for only 15% of all bank credit. Of the Rs.11,24,300 crores lent by commercial banks as on end March 2005,only Rs.1,60,479 crores went to rural India!

The Prime Minister seems to have all the time in the world to write long congratulatory letters to bank chairmen! While he doesn’t bother to acknowledge even the letters we ,the common citizens, even the media people who write to him to bring home certain realities on which the Prime Minister of a country must surely be having a grip. Otherwise, you will see more deterioration, be it Naxalite violence or  the growing corruption.

The entire North East, the many small but highly volatile states taken together haven’t received any attention from the PSU banks. These states account only 3% of outstanding loans! In fact, the entire region has outstanding loan of only Rs.5,063 crores, which is just a fourth of total loans extended to AP, rural AP which at Rs.20,511 crores had the highest rural loans.  As far as farm credit is concerned, barely a third is investment credit. There is very little by way of capital investment.  Then what do you likely to expect from the current state of stagnating farm credit scenario?

So, on the one hand the PSU banks don’t do their mandated jobs, under one pretext or other. The PM/FM doesn’t have the time or the will to revamp the farm credit, farming is suffering. On the other, you have the state level politicians who play havoc with populism, whimsical write offs where they can, only in the co-op sector but not in the PSU banks sector where the politicians have no power!

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