The Hindu Business Line : Banks may get to vend stamp papers

New Delhi April 18 The issue of sale of judicial/non-judicial stamp papers by public sector banks (PSBs) is likely to come up for discussion during the Finance Minister, Mr P. Chidambaram's meeting with the chief executives of these banks here on Thursday.

The Reserve Bank of India had sent a proposal to the Government for allowing PSBs to undertake buying and selling of stamps/stamp papers as a "permissible activity" under the Banking Regulations Act.

The central bank had requested for notification by the Government. The RBI had noted that even though there are no statutory provisions prohibiting PSBs from selling or buying stamp papers, there are no specific provisions permitting such an activity by these banks.

The Government had, however, felt that the impact of such a move on the earning capabilities of small vendors of stamps/stamp papers should be ascertained.

The Government had therefore asked the RBI to provide justifications for allowing PSBs to undertake buying and selling of stamp papers . It also wanted the RBI to provide information on the impact on profitability of banks in case these activities were allowed.

RBI has now sought the views of certain banks on this matter, official sources said, adding that the views of these banks are awaited.

In the aftermath of the Telgi scam, some States had entrusted the job of vending of judicial/non-judicial stamp papers to banks.

Bank credit for IAY beneficiaries?

The Finance Minister, Mr P. Chidambaram, may urge public sector banks (PSBs) to lend Rs 20,000 to each beneficiary of the Indira Awas Yojana (IAY) as bank credit to supplement the grant under this scheme.

Under IAY, Rs 37,000 for new house and Rs 12,500 for repairing an old house are presently given to the beneficiaries. As these amounts are insufficient, beneficiaries are forced to borrow from the market.

Instead of benefiting from the scheme, the beneficiaries are getting into debt.

With the cost of new house estimated at Rs 55,000-Rs 60,000, the facility of bank credit is expected to make up for the difference.

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