Monday, August 29 2005 10:06 Hrs (IST) - World Time -

Sivaganga: Union Finance Minister P Chidambaram yesterday (August 28, 2005) reiterated that nationalised banks would not be privatised and that reforms in the banking sector would continue.

Public sector banks would continue as such,with the Centre being the major shareholder. "What the central government wants now is for them to grow," he said, addressing a meeting, organised to mark the merger of Self Help Groups here.

Praising Nationalised Banks for their role in agriculture sector lending, he said that they had lent Rs 1.15 lakh crore to the sector, exceeding the target by Rs 10,000 crore.

The banks had also earned a profit of Rs 38,737 crore and had given the government dividends and tax. Besides, the Non Performing Assets had been reduced by Rs 2,100 crore. They had also made a mark in education loan lending.

Above all, nationalised banks had helped the government realise its dream of helping people at the grassroot level by extending loans to Women's Self-help groups, Chidambaram said.

He said staff of the Pandiyan Grama Bank, the top ranking Regional Rural Bank in all parameters, would receive pay on par with the nationalised bank staff, as an agreement had been reached in this regard. The orders would be issued hortly.

Claiming that the Congress government was responsible for introducing the SHG concept in India in 1992 (prior to which micro financing groups were set up in 1989), Chidambaram said he was happy that SHGs have become successful.

But people should know the history, where Congress played a major role in their formation when Manmohan Singh was finance minister"

"Now many are claiming that they were responsible for the formation of SHGs and even claim a close relationship with them", he said.

When the UPA government came to power, there were 10.70 lakh SHGs. In one year, their number had touched 16 lakh, with 2.5 crore members. The growth exceeded the government's expectations and target, the number being achieved in just one year, instead of the targeted three.

The main reason for this was that nationalised banks, NABARD or SIDBI were eager to extend loans, as they repaid 99 per cent of the amount, unlike industrialists, tycoons and the rich, who have availed of Rs 3,000 crore, but did not repay.

He said banks had lent Rs 7000 crore to SHGs. Some of them, which started with just Rs 25,000, had achieved a business of Rs 2.5 crore within a short period.

He also appreciated the role played by both DMK and the AIADMK in promoting the SHG concept and pointed out that under the 'Swarna jayanthi Gramin Yojana scheme, by which the Centre and state governments helped 30 per cent of SHGS, the Centre's share was 75 per cent.