On January 17, India Daily published an article that the banking officials, who sanction loans for public, will have to take into account the receiver’s religious background under the title Vote ‘Bank’ Politics: Minorities to Get Easy Loans from Banks.

The banking division of ministry of finance, in a January 9 letter, had asked IBA to examine the proposal to set aside 15% of priority sector lending in all categories only for the people of minority communities.

Now, the Reserve Bank of India and other public sector banks have written to the Central government that Centre’s proposal to banks to reserve a share of loans for members of minority communities is unviable.

The RBI and the Indian Banks’ Association (IBA) have told the government in a written statement that the lending practices should go with the borrower’s creditworthiness and not his caste or creed.

According to the reports, finance minister P Chidambaram is also not in favor of the idea. Currently, according to the banking norms, commercial banks must lend 40% of loans to farmers and small businessmen.

A senior IBA official said on this matter:

Deviating from the basic principles of banking is not good idea. This proposal is not practicable and not enviable. Banks lend money on the basis of creditworthiness of an individual.

Banks do not ask for such information from any customer. Both the FM and RBI share the same view.

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