The Hindu Business Line : PSBs’ education loan sanctions at Rs 20,000 cr

New headquarters: The Union Finance Minister, Mr P. Chidambaram, and the Indian Bank Chairman and Managing Director, Mr M. S. Sundara Rajan , at the foundation stone laying ceremony for the bank”s new headquarters in Chennai, on Wednesday. –

Our Bureau

Chennai, July 9 The foundation stone for Indian Bank’s Rs 67-crore corporate office was, on Wednesday, laid by the Union Finance Minister, Mr P. Chidambaram.

The plan is to construct a four-storey building on 86,000 sq. ft. that the bank owns in the heart of the city — the spot where the bank’s Royapettah branch stood. The new building will be ready for occupation in 18 months.

After laying the foundation stone and delivering the inaugural speech, the Finance Minister took a close look at the three-dimensional model of the upcoming building and told Mr B. K. Katyal, Managing Director of the project’s architects, Pheroze Kudianval Consultants Engineers Pvt Ltd of Mumbai, not to compromise on the quality of materials.

He noted that Indian Bank had come a long way since the time, a decade ago, when its very survival was a question.

Agricultural loans

Mr Chidambaram said that agriculture loans given by banks would exceed the year’s target of Rs 2.8 lakh crore and cross Rs 3 lakh crore. He said that it was a big achievement that the “agricultural loan waiver” scheme had been implemented without a hitch within one month.

He said that the government had stood by its commitment that banks would be compensated for the loan write-off. The Finance Minister said that it was possible to reconcile the social objectives of the government with the commercial objectives of banks and pointed to the loan waiver scheme as an example.

Noting that financing 9 per cent growth was a very different ballgame than financing lower rates of growth, he said that it brought with it some expected and some unexpected challenges, such as inflation. “Credit will expand, capital flows will increase and the high inflation is a consequence of this,” Mr Chidambaram said.

Just as the government was taking measures to tackle inflation, there was an unexpected surge in the prices of crude oil and commodities, he said. However, he expressed confidence that with patience and prudent economic measures, the challenges would be overcome. Praising public sector banks, the Finance Minister observed that the banks had given Rs 20,000 crore of education loans to 12 lakh students — an unprecedented achievement anywhere in the world.

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