The Hindu Business Line : Thrusting insurance policies along with SHG loans not justified: Reddy

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Thrusting insurance policies along with SHG loans not justified: Reddy

— P.V. Sivakumar

The Andhra Pradesh Chief Minister, Dr Y.S. Rajasekhara Reddy, at the State-level Bankers’ Committee meeting in Hyderabad on Wednesday. Beside him is Mr R.S. Reddy, Chairman and Managing Director of Andhra Bank.

Our Bureau

Hyderabad, Nov. 12 The Andhra Pradesh Chief Minister, Dr Y.S. Rajasekhara Reddy, has asked bankers not to force life insurance policies on those taking loans under Indira Kranth Patham (IKP) as it is not justified.

Speaking at a meeting of the State Level Bankers’ Committee (SLBC) here on Wednesday, he said, “Imposing insurance was against the instructions of the Reserve Bank of India. Besides, all the self-help group (SHG) members under urban and rural IKP were all adequately insured with nominal premium amount.”

He added that in many cases, the move was resented by SHGs as many were in no position to pay the second year premium and the policies were lapsing.

The President of the SLBC and Chairman and Managing Director of Andhra Bank, Mr R.S. Reddy, said that steps would be taken to return the premium amounts wherever such policies were sold forcibly and also see to it that such actions are not repeated in the future.

“Some political parties are assuring the SHGs not to pay their dues to banks, as they would waive them when they come to power. The State’s financial resources will not be able to take such a burden as it could be over Rs 20,000 crore,” Dr Reddy said referring to loans extended to SHGs.

He also urged the bankers to bring the data on all the dormant Government accounts online to unlock the resources.

The Finance Minister, Mr K Rosaiah, said that though the overall performance of banks in the State was satisfactory, there were some areas where efforts have to be stepped up.

“There are some problems in extending finances to programmes like Jawaharlal Nehru National Urban Renewal Mission, self employment group programmes. The Government on its part is ready to extend all the necessary help to bankers whenever there is a problem,” he said.

Bank deposits rise

The total deposits of the banking sector in Andhra Pradesh registered an increase of 20.12 per cent during the first half of the current financial year to Rs 1,82,708 crore as against Rs 1,52,101 crore during the corresponding period last year.

The advances for the April-September period grew 33.35 per cent to Rs 1,83,629 crore (Rs 1,37,703 crore), according to the data presented at the State Level Bankers’ Committee (SLBC) here on Wednesday.

The credit deposit ratio of the banking sector in the State during the period was 100.5 per cent (90.53 per cent) as against the stipulated ratio of 60 per cent.

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