The Hindu Business Line : Plan to set up control registry for mortgage loans in Karnataka

Speaking at the SLBC meeting here today, the Syndicate Bank Chairman and Managing Director, Mr C.P. Swarnkar, said that discussions were under way with the State Government on the modalities for a repository scheme that would be essential for the proposed mortgage registry.

Syndicate Bank is the SLBC convenor in Karnataka. The banks involved in setting up the registry include State Bank of Mysore (SBM), Canara Bank, Vijaya Bank and Corporation Bank. The discussion involved details of repository and title insurance schemes proposed to be set up by the government.

Financial inclusion

Referring to financial inclusion, so far 10 districts in the State have been declared 100 per cent compliant, Mr Swarnkar said. Under financial inclusion, banks have opened over 25 lakh non-frill accounts in the State. He said that the task of inclusion would be inconclusive if the banking sector did not meet the credit requirement of the households to take up viable economic activities. But he added that the credit deposit ratio in Karnataka was 79.68 per cent, well above the national average of 70.8 per cent.

In rural areas the ratio was as high as 96.15 per cent, he said. Advances till June end this year, was Rs 20,854 crore, a growth of over 24 per cent over the corresponding period of the last financial year.

Outstanding priority sector credit was Rs 51,138 crore, comprising 47 per cent of the gross advances. Of this outstanding farm advances were Rs 21,411 crore or about 20 per cent of the gross advances.

Interest waived

As relief for debt stressed farmers in six identified districts, commercial banks, regional rural banks and cooperative bank have waived interest overdue till June 2006 amounting to Rs 720 crore. He said that Nabard had already released a sum of Rs 96.11 crore to the RRBs/cooperatives as compensation for the waiver.

Similarly shares of the write offs were released to the State bank of Hyderabad and the private sector ICICI Bank as part of the centre’s share. However, Mr Swarnkar said that the state government was yet to release its share of the farm write offs, leading to loss of interest to the banks.