Complex Bank Loan Norms Push People To Money Lenders On Higher Interest Rates

Kullu: Though there are many schemes by banks to help needy people to start their business at initial stage or getting them benefitted at difficult times by applying for loan on much less interest rates as compared to interest rates on loan taken from private money lenders. Credit goes to complicated and time consuming formalities causing trouble for poor applicants who are not able to give that much time and capable enough to understand that lengthy process. But on the other side, experts stress on more awareness campaigns educating public about the entire process.

Ram Nath, a middle aged native of Kais village, on left bank of Kullu -Manali road told Hill Post that he too took the loan from a private money lender after finding it very difficult to have loan from bank. He said, ”If one thinks to take loan for business or any purpose, visit hopefully to bank applying for loan but left confused and totally hopeless when comes to know about such long detail of formalities to be fulfilled by applicants. There are so many formalities and documents required that it could take very long time and proved to be very tiresome and time consuming work. That’s the only reason behind approaching a private money lender for loan even on more interest than banks. Presently I’m paying 20% interest while it could be around 14-15% on bank loan.”

Kishan Shriman (35), a farmer and a businessmen from Kharahal Valley of district Kullu also criticised banks’ long process and formalities to be fulfilled before getting any loan. He said, ”Though I’ve taken the loan of 4 lakhs on 15% interest from a bank last year as being an educated person I expected to do it easily, but entire process is really very time consuming, tiresome and irritating. Bank asks for many steps to follow such as depositing affidavit, land papers etc. I spent around 25 days roaming around patwarkhana and court for those papers and finally got the loan. But suppose if a daily wager could waste his 25 days for loan, what will he earn to have food.”

”Issue was raised during a workshop by RBI was held at district headquarter Kullu last year (2017). I talked to officers present on the occasion to solve the issue of complicated and time wasting process for loan, they assured to take steps in this regard soon but this assurance remains merely an assurance so far as no solid step in this regard seems to be taken so far to ease the process, ”Kishan Shriman further added.

While on the other hand bank officers claim about taking proper care of loan appliers when it comes to help and guide them during applying for it.

Subhash Chand Sharma, a banking executive working at Chandigarh when contacted by Hill Post said that banks were helping people from all walks of life who were interested in obtaining loan.

He said, ”Banks always remain friendly with applicants and provide every possible help and guidance to them. Even Many awareness camps too are held at different areas especially in rural areas to make people aware about getting loan easily and it’s benefits from banks. Bank never denies any of applicants if required formalities are properly met”.

On the other hand, Dr. Sikander Kumar, professor of economics in HPU (Himachal Pradesh University) Shimla emphasised upon focusing to work on making public aware while appreciated government’s new move to make the every banking process easy for common man.

He said, ”If we look 10 years back, while discussing on banking system including formalities to have loans, it was much difficult comparatively. Jan-Dhan yojana is an example for such move which starts with zero balance. Government has eased almost every banking process very much which could help people for getting loan without much complication. The only need of the hour is disseminating information through properly planned awareness system to make people understand all these, once this is done no doubt everyone would like to come to banks without any fear or confusion of complicated procedure.”