Financial Daily from THE HINDU group of publications
Saturday, Dec 13, 2003
Financial Daily from THE HINDU group of publications Saturday, Dec 13, 2003 |
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Money & Banking
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Credit Cards & Debit Cards RBI pulls up banks over kisan credit cards Our Bureau
Mumbai , Dec 12 THE Reserve Bank of India (RBI) on Friday expressed concern over the ineffectiveness of the Kisan Credit Card programme and also the lack of penetration of retail credit into rural and semi-urban areas. The Kisan Credit Card designed in keeping with RBI and Nabard's guidelines to provide short-term credit to farmers is working like regular credit cards, Mr Vepa Kamesam, Deputy Governor, RBI, said on the sidelines of the 25th Bank Economists' Conference 2003. "Although over 1.5 crore cards have been issued to farmers, banks are not dispensing credit through it. Very often the credit is being used to set off against the previous outstanding amount. The millions of cards given out are only in the books and form mere statistics," he elaborated. The Kisan Credit Card scheme was designed to follow simplified procedures to enable farmers to avail themselves of crop loans as and when need be. Started in 1998, it aims to cover all `eligible farmers' — landowning farmers and tenant farmers, about five crore in number — by March 31, 2004. "More and more banks are now focusing only on retail businesses forgetting all other segments. Even within retail business, banks are concentrating on metropolitan cities and not penetrating the rural areas or even funding small businesses," Mr Kamesam said while chairing the panel discussion `Retail Banking: Challenges Ahead in Distribution Channels in Urban/Rural India' at the conference. According to Mr Michael Bastian, CMD, Syndicate Bank, the rural market in India is as large as Rs 1,10,000 crore but most of it is going untapped by banks. "Certainly there is an issue of lack of infrastructure, but that only makes networking of branches all the more necessary," he said. Ms Chanda Kochar, Executive Director, ICICI Bank, said that the rural customer was very responsive to changing technologies, very much like the urban customer. She narrated an anecdote of a bare-chested man dressed merely in a dhoti using a debit card in an ATM.
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