Parliament committee urges banks to ditch bureaucratic loan approach for common man

K C Venugopal and other MPs also questioned the banks on financial inclusion and rural connectivity, Non-Performing Assets and wilful defaulters as well as the failure of banks to open branches in every five kilometres, regulatory reforms in dealing with UPIs.

New Delhi: Parliament’s Public Account Committee (PAC) headed by senior Congress MP KC Venugopal on Tuesday asked public sector banks to to shun “bureaucratic approach” in dispersing loans to the common man, as they grilled top officials of the Ministry of Finance, RBI and four banks on reforms in banking sector.

Officials are learnt to have informed the multi-party committee that the RBI was analysing the impact of the new US tariff regime and it is felt that it could be positive in long term as several companies may find India more suitable to set up shops compared to China. They also told the panel that they were working on a Bill to ban lending apps.

Financial Services Secretary M Nagaraju and senior officials of SBI, Punjab and National Bank, Canara Bank and Indian Bank appeared before the panel followed by RBI Governor Sanjay Malhotra and M Rajeshwar Rao and faced questions on cyber security, digital fraud, students loan, financial inclusion, Non-Performing Assets and regulatory framework for UPI among others.

Venugopal and other MPs also questioned the banks on financial inclusion and rural connectivity, Non-Performing Assets and wilful defaulters as well as the failure of banks to open branches in every five kilometres, regulatory reforms in dealing with UPIs. Sources said the MPs demanded that financial institutions should develop an early warning system against digital frauds.

Sources said concerns were raised about students, especially from the fisher-flock and marginalised communities, and others facing difficulties in securing loans from banks. The panel urged the banks to shun “bureaucratic mentality” and adopt “entrepreneurial approach” in disbursing loans.

Venugopal asked about writing off loans of people impacted by natural calamities, to which officials said they were writing off loans of those who lost their lives while for others, relaxation is given on payment.

On financial inclusion, sources said officials told them that Jan Dhan Yojana and Mudra loans are being effectively implemented. When they told the panel that 52 crore Mudra accounts were opened, sources said the MPs asked for the number of beneficiaries and employment generation and as the statistics were not readily available, officials were asked to submit details in writing.

MPs also questioned about posting officials from Hindi-speaking states in non-Hindi localities, resulting in difficulties for locals in communicating their issues. Officials said they have changed the recruitment procedure and people with proficiency in the local language are posted.

Concerns were also raised about bank amalgamation, especially regional rural banks, and transfer of employees arising out of such a situation.

On around Rs 8,800 crore capital infusion into SBI, the MPs asked for the rationale behind it. Venugopal asked about writing off loans of people impacted by natural calamities to which officials said they were writing off loans of those who lost their lives while for others relaxation is given on payment.