Govt comes under fire in RS for banking policies

New Delhi, May 17 (UNI) The government came under fire in the Rajya Sabha today for encouraging privatisation of banks which had resulted in demented growth in the agriculture sector and nearly Rs 2,50,000 crore lying unutilised with banks.

Parliament also passed the Central Road Fund (Amendment) Bill, 2007, which seeks to change the Central Road Fund Act for raising funds to develop roads in rural areas.

The Bill also allows the Central government to use the share of funds for repayment of any loan taken for development of rural roads in any state or union territory.

Speaking during the debate on State Bank of India (Subsidiary Banks Laws) Amendment Bill, 2007, Mr Ramdas Aggarwal (BJP) and Mr Brij Bhushan Tiwari (Samajwadi Party) said because of the banks' faulty lending policies, agriculture growth had taken a beating and funds had accumulated with banks which should have been actually given to farmers as low interest loans.

Mr P J Kurien (Cong) said banks should devise a policy for Small Scale sector and give loans to farmers on four per cent interest.

The Bill was introduced by Mr Sis Ram Ola.

Mr Aggarwal lamented the ''politicisation'' of the banking sector and said banks had stopped giving loans to small farmers for want of security which had resulted in agriculture growth going down to two per cent.

He said Rs 250,000 crore were lying as reserve funds with various banks in the country while these should have been given to farmers.

Mr Kurien said lots of funds were locked on Non-Performing Assets (NPAs) and emphasis should be on improving SSIs. The government should adopt a liberal approach on one-time settlement and correct the current imbalance in Credit Deposit Ratio.

He said banks should devise a soft policy for the SSI sector and give loans to farmers on four per cent rate of interest.

Mr Brij Bhushan Tiwari, while criticising the trend of privatisation of banks, said they had a social obligation. Social banking system needs to be started, he added.

He said Rs 45,000 would be needed for the agriculture sector while only Rs 2000 crore had been given.

Mr Tapan Sen (CPM) opposed the dilution of government equity in all Public Sector Undertakings (PSUs).

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