Unique identification number planned to track bank loans

Soon, there will be farreaching changes in approval of loans by banks. A customer applying for a loan from a bank may also get a unique identification number through which he or she can track the status of his/her loan online.

This will give information about the number of officials involved in sanctioning the loan, the stage at which the application was rejected, and the official who rejected the loan application.

The move, which is in the final stages of discussion, will bring in more transparency in sanctioning of loans and check cases of bribery in disbursal. The lenders will also be asked to monitor the end use of loans disbursed and keep close watch on the activities of a company or individual availing of the loan.

Steps are also planned to make credit appraisal in state-owned banks more stringent to put a break on non-performing assets. Once Finance Minister Arun Jaitley puts a seal of approval on the proposal, an advisory will be issued to banks to give loan approvals in a timebound manner.

“We are working on various new ideas to make the whole issue of credit disbursal easier, friendlier and transparent. Loan disbursement has to be done in such a manner that it cuts the role of intermediaries,” a senior government official told Deccan Herald.

The measure is being expedited after the Syndicate Bank loan fraud case came to the fore last month, in which the bank CMD was accused of accepting Rs 50 lakh to enhance the credit limit of some companies. On the NPA front, government is working on limiting the role of officials in declaring loans as non-performing. Guidelines will also be issued on setting certain parameters and strictly adhering to the 90-day norm for NPAs.

At present, banks classify a borrower's (consumer or corporate) account as NPA after continuous non-payment of principal and interest for 90 days and make necessary provision for the same. These rules are governed by RBI regulations on NPA classification. However, non-banking finance companies and the Power Finance Corporation are not governed by the RBI classification.

It is likely that RBI may be made the sole regulator of borrowing and lending in the country in all cases.