Nabard-like status likely for agencies funding poors

Written by Mukesh Ranjan | New Delhi, May 21 | Updated: May 23 2008, 02:58am hrs
In a move to harness optimal potential of the special national development corporations, which are working to meet the financing requirement of SCs, STs, minorities, OBCs, handicapped and safai karamcharis, the government is considering to convert them into national banks on the lines of Nabard.

These development corporations are at present working with wholly paid up capital from the government and are part of the ministry of social justice and empowerment. The corporations lend money to the state-level canalising agencies, which in turn provide re-finance to the actual beneficiaries of their respective categories.

"In a bid to make these national financing agencies more professional and enhance their capacity to widen their reach, we have mooted a concept paper for the government to consider converting them into national banks on the lines of Nabard," said Prof Bhalachandra Mungekar, member (education and social sector), Planning Commission.

Mungekar said such a move would improve aspects of their activities to serve better the deprived sections of the society. "Once given the status of a national bank, these will help in enhancing the paid-up capital, equity capital and the authorized capital and these would be able to widen its credit network in the country," he added.

The move would help these intuitions to settle issue relating to "guarantee and security" and improve rate of recoveries. At present, these corporations only disburse about Rs 500 crore a year and the beneficiaries are only around 30,000-40,000 people.