Money & Banking

Budget spur for KVG Bank

Our Bureau Hubli | Updated on March 01, 2011

One of the biggest beneficiaries of the Union Budget in north Karnataka is the Dharwad-based Karnataka Vikas Grameena Bank (KVG Bank), a regional rural bank sponsored by Syndicate Bank.

KVG Bank has significant exposure to the handloom sector in Gadag region in north Karnataka. As weavers face economic stress, the finance minister, in order to help them repay debts to handloom weaver co-operative societies and make them financially viable, has proposed Rs 3,000 crore to Nabard, in phases, for these co-operative societies.

“The initiative will benefit co-operative societies in north Karnataka,” said Mr K.P. Muralidharan, chairman, KVG Bank.

The bank is active in providing bank linkage to self-help groups (SHGs) in north Karnataka region. “Allocation of Rs 500 crore towards women SHGs will help boost SHG activities,” said Mr Muralidharan.

“Also, several steps have been proposed for infrastructure development, such as tax-free bonds, to help regional development in the country,” he added.

KVG Bank has major exposure to the agricultural sector. “The Budget has given encouragement and support by reducing the customs duty on agricultural machinery to 4.5 per cent from 5 per cent and raising the target of credit flow to agricultural sector and by giving 3 per cent interest subsidy to farmers during 2011-12,” said Mr Muralidharan.

Talking about linking Mahatma Gandhi National Rural Employment Generation Scheme (MGNREGS) wage rates to Consumer Price Index (CPI), Mr Muralidharan said “It will result in enhanced payment to the beneficiaries. Bringing all housing loans up to Rs 25 lakh under priority sector advances, from Rs 20 lakh, is also an important step.”

With regard to rural housing, it is the responsibility of regional rural banks such as KVG Bank to provide housing finance to targeted groups in rural areas at competitive rates, he said.

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Published on March 01, 2011
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