State-run banks will conduct a massive credit outreach programme in all districts of the country on Wednesday and will enrol customers for various official schemes, especially in insurance.
The outreach programme is curated as part of a week-long celebration of the finance and corporate affairs ministry under the so-called Azadi Ka Amrit Mahotsav. It is also a part of the government’s efforts to ensure greater and easier credit flow, as the economy recovers from the damage caused by the pandemic.
In October 2021, public-sector banks (PSBs) were directed to launch a similar outreach programme for a longer period in the build-up to Diwali to take advantage of a potential rise in credit demand during the festive season. Banks had sanctioned loans of Rs 63,574 crore through the outreach drive between October 16 and 31 last year. Similarly, lenders had disbursed credit of as much as Rs 4.94 trillion through similar outreach programmes between October 2019 and March 2021.
Having remained subdued over most part of the last two years, credit growth has improved in recent months, and the government wants this momentum to accelerate further. Non-food bank credit grew 11.3% on year in April, compared with 9.7% in the previous month and 4.7% a year before. However, loans to industry grew at a slower pace of 8.1% even on a marginally-contracted base.
The finance ministry said on Tuesday that all state level bankers’ committees (SLBCs) have been asked to conduct the both the loan outreach programme and the enrolment for schemes like the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradahan Mantri Suraksha Bima Yojana (PMSBY) and Atal Pension Yojana. They will also seek to enhance customer awareness and financial literacy, while recognising the good work done by the branches, the ministry said.
The PMJJBY is a universal social security system, especially for the poor, while the PMSBY provides cover for death/disability due to accident. The government recently hiked the premium for the PMJJBY and the PMSBY by 32% and 67%, respectively, in a bid to make them economically viable. However, despite the increase, the premiums for the PMJJBY and the PMSBY still stand at just Rs 436 and Rs 20, respectively, per year.