Hyderabad: While making a killing out of the Pradhan Mantri Jan Dhan Yojana in Telangana state, banks are denying loans to account holders, defeating the very purpose of the scheme.
Prime Minister Narendra Modi had launched the scheme across the country in August 2014. Banks have to lend a cumulative Rs 5,000 to each account holder but hardly any bank is doing so.
Public and private sectors banks have raked in nearly Rs 700 crore so far from 71 lakh account holders in TS, but are shying away from extending loans.
Roadside vendors, shopkeepers and others normally need small loans for their trades. These people, who opened accounts under Jan Dhan, are continuously approaching the banks to obtain loans but in vain. This is forcing them to take loans from private moneylenders at higher interest rates.
Under the scheme, on opening a bank account, holders are initially eligible for an overdraft facility of Rs 2,000, which can be extended up to Rs 5,000 based on the consumer’s credit and transaction history. Account holders will also get a RuPay debit card with an accident cover of Rs 1,00,000.
However, this exists only on paper with banks refusing to give loans fearing default on repayment. Some banks meanwhile are willing to give only Rs 500 to Rs 1,000.
“I run a roadside vegetable and fruit shop. I have opened the account in Andhra Bank and made savings of Rs 3,000 so far. When I sought Rs 5,000 loan for business purpose, the bank refused. After approaching the bank for four to five months, they agreed to give Rs 1,000 loan. What purpose will it serve? I was forced to take Rs 5,000 loan from a private money lender at a higher interest rate,” said B. Veeresham of Uppal.
An SBI executive said, “There seems to be a misconception among account openers that they don’t have to return the loan under this scheme. Due to this, we are either rejecting loans or extending a smaller amount initially. The government needs to take up an extensive awareness programme on this scheme to dispel misconceptions.”
As per the statistics available with the Finance department, while 80 crore bank accounts have been opened across the country under the scheme, banks have extended credit facilities to only 1.64 lakh account holders so far. Even in TS, out of 71 lakh account holders, less than 90 people have got loans.
