It is common knowledge that people benefiting from reservations in jobs and educational institutes are mostly the ones that constitute the creamy layer. No lessons learnt, politics still rules. On the 9th of January comes the shock. The Finance ministry (Banking Division) has advised the Indian banks to set aside 15% of priority sector lending for minorities. Public sector banks are supposed to lend 40% of total loan disbursed, to the priorty sector (Farmers, small scale businessmen and others like them). Out of this 15% will be given to the minorities which is 6% of the total loan disbursed.
Firstly banks are commercial ventures and should be treated like that. When a banker lends money he doesn’t expect it to be a bad debt. He wants the money back in his kitty. The success of a banker depends on how good he is at disbursing loans and thus he tries to give it to the most credit worthy person. Aziz Premji need not be a Hindu, Muslim, or Christian to get loans. Grameen bank (this year’s Nobel prize winner) is a commercial venture and that is why it is able to help so many people cross the poverty line. Our Public sector banks are as such under pressure because of political interference and are thus fighting hard to compete with private banks which face no pressures of this sort.
What will happen here is that bankers will end up pushing loans to minority customers already doing well, and the poor among them will be left where they are. These are the views of an ordinary Indian citizen who doesn’t understand economics. With an economist like Manmohan Singh at the helm we expected better sense.
from Vishesh :)
from Reema :)
