Despite consistently increasing their business in Kashmir, most of the banks operating in the Valley don’t adhere to RBI instructions on priority sector lending. Interestingly, some top-notch banks including HDFC Bank, ICICI Bank, Yes Bank, Axis Bank and IndusInd Bank also come in the list of banks that are flouting the Central Bank norms laid down for lending to the priority sector including agriculture and loans to weaker sections. Interestingly, the HDFC Bank is planning massive expansion in the state, even as targeting to increase its branch strength to 50 by March. According to the latest RBI norms, all domestic banks have to disburse 40 per cent of the net bank credit to priority sector, out of which18 per cent should represent agricultural advances. The net bank credit is the figure reported in the fortnightly return the banks submit to the RBI. The RBI norms further provide that the banks should cater to the weaker sections of the society, particularly small and marginal farmers with five acre land holding and landless labourers, tenant farmers and share croppers. For artisans, village and cottage industries, the banks, according to RBI guidelines, should extend individual credit limit up to Rs 50,000. Around 10 per cent of the Net Bank Credit has to go to weaker sections of the society and the Target Credit to women beneficiaries should be five per cent. The loans applications of the priority sector, RBI rules say, can be rejected by the branch manager, provided the rejection is later ''verified by the Divisional Manager or regional manager''. Figures reveal that most of the banks fail the guidelines. “The ICICI Bank only provides basic banking facility like deposits and ATM services while credit cards, loans and mandatory priority sector credit exposure are not being taken seriously,” sources said. Figures reveal that the Yes Bank, with deposits of around Rs 40 crore in the state, has not a single case of lending in J&K in any sector. “Both Axis and IndusInd banks have no lending facility at all and have restricted to customer deposits and banking services, thus making only profit with no credit exposure to contribute to the state’s economy,” sources said. However, a senior HDFC Bank executive said the HDFC Bank was aggressively advancing in the state. “We are here for the last five years only. During this brief period we have made around Rs 280 crore advances in J&K with about Rs. 100 crore to priority sector alone.” He said the Bank in the state has appointed entire staff as well as the top management from J&K alone. About maintaining 40 per cent credit target to priority sector, he said: “Although we may not be covering the 40 per cent target, but still our priority sector lending in J&K won’t be less than 35 per cent,” he said, adding that the RBI guideline for priority sector is not state or region-specific. Despite repeated attempts, officials of other banks could not be contacted for their comment.
Greater Kashmir
