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Hyderabad, Date:13.10.2010
SLBC meeting
HYDERABAD: The Chief Minister Dr K Rosaiah today appealed to the Banks to come to the rescue of the rural poor and SHG members in a big way. He said it is the joint responsibility of the Government and the banks to help the poor people in distress and who are being harassed by the MFIs. He said the Banks should swap their loans with Bank loans on the lines of Sircilla. "You have to rise to the occasion. You have to reach out to the rural people in a big way. In this crucial times we should all work together and help the people in distress. While the Government appreciate the Banks for stepping up bank lending in the last 6 years, now is the time that banks should also come to the rescue of the rural poor and SHG members", Dr Rosaiah said.

The Chief Minister immediately on his return from Vijayawada held a review meeting with Chief Executives of all the Banks, Ministers and top officials at Camp Office. Following Chief Minister's suggestion, Bank Executives agreed to convene an Emergency State Level Bankers Steering Committee (SLBC) meet immediately on the specific issue.  Bank Executives agreed with Chief Minister's remarks and assured him that they will make an all out efforts to help the rural poor. They explained that multiplicity of money lenders is the main reason for the present crisis and the rural poor people are going for multiple borrowing as per their needs.

The Chief Minister told the Bank Executives that MFIs came into existence with a view to ensure 100% financial inclusion in areas which are uncovered by Banking Network. He said that MFIs are thriving on the strong institutional base established in AP. But the MFIs are resorting to unfair practices of lending and recovery. The Chief Minister also agreed that Multiple borrowing is a major problem and has potential to bring down the entire financial sector.  It is leading to defaulting on cheap loans from Banks by SHGs and repaying the more expensive loans of MFIs.

He said untimely availability of loans and under financing are the primary factors driving SHGs members to the MFIs.  Keeping the above in view, the CM advised the Banks to expedite SHG Bank linkage planned for 2010-11. The banks should go for Debt swapping of the loans given by MFIs at usurious rates following the Total Financial Inclusion (TFI) mode.  He requested the Banks to implement commitment given to saturate grounding of TFIs covering all rural areas in three years.The Chief Minister reiterated his appeal to step up bank lending considering the needs of the poor.

Ministers Vatti Vasantha Kumar, N.Raghuveera Reddy, R.Venkat Reddy, Chief Secretary, S.V.Prasad, Special Chief Secretary, Finance, G.Sudhir, Principal Secretary, Rural Development, R.Subramaniam, Executive Director, Andhra Bank, Anil Girotra and Executives of all other Banks and officials attended the meeting.