Banks put up a poor show as deposits drop

The burgeoning political confusion over the announcement of farm loan waiver by the state government seems to have dampened the spirits of banks, especially in the public sector.

The confusion has resulted in a sudden drop in deposits and their renewal, besides halting the recovery process completely. The performance of the banks was reviewed by Union Minister for Statistics and Programme Implementation D V Sadananda Gowda in Bengaluru Urban Zilla Panchayat on Monday.

The review revealed that the renewal of deposits dropped by 20% in both urban and semi-urban areas.

K N Manjunath, Divisional Manager, Lead Bank said, “The drop can be attributed to the political confusion surrounding loan waiver. With the government about to take a stand in a few days, the performance will be better in the coming days. While renewal has seen a dip, deposits have marginally gone up by 9.6%.”

Education loans

The minister expressed concern over non-availability of education loans to youngsters.

“There have been many complaints that youngsters are finding it tough to get education loans. Bankers must encourage them to study more by providing loans,” Gowda said.

The bankers, however, maintained that they have posted good results with loans for those pursuing higher education abroad. But there have been a few technical glitches for those pursuing within India under the limit of Rs 10 lakh.

Following several complaints about bank branches being shut soon after the merger of SBM with SBI, Gowda said, “The bankers must ensure that there is one branch in every six-kilometre radius. Urban areas in BBMP limits will have several banks. But on the outskirts and semi-urban areas, people depend on public sector banks and they must cater to their needs,” he said.

The minister also urged bankers to distribute more RuPay cards by withdrawing the normal ATM cards, as the former comes with several benefits.