Exclusive HOLI Discounts!
Get Courses and Combos at Upto 50% OFF!
Upgrad
LCI Learning

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

Sneha Mukharjee (Executive)     29 June 2011

To check corruption, finance ministry directs PSBs to mainta

 

The finance ministry has directed state-run banks to maintain proper loan records to check corruption and for timely disbursement of credit.

 

"We have received complaints about inordinate delays on part of banks in clearing loan applications. There have been cases when such delays have resulted in unfair practices," said a senior finance ministry official explaining the move behind the decision.

 

As per the government records, there are about 6,550 such complaints against banks.

 

The government has also requested RBI to revisit the guidelines on loan application and monitoring of records.

 

The Central Bureau of Investigation ( CBI )) is already investigating officials of the LIC Housing Finance for accepting bribes to approve loans.

 

"In some cases, branch officials delay the loan process and collude with intermediaries for approving the same. If there is a proper record maintained then such practices can be arrested," the finance ministry official said, requesting anonymity.

 

At present, a bank has to enter a loan request in a record book once it receives a complete loan application form. "The loan application needs to be sanctioned or cancelled within 15 days of the receipt and bank has to update its record book on the same," said a senior official with country's largest bank State Bank of India .

 

But in most cases, banks do not maintain such records, allowing them to delay decision on the loan and seek bribes.

 

The finance ministry has pulled up banks for not maintaining the 'Loan Application Receipt and Monitoring Registers,' and has pointed out that most bank branches are doing so at their own convenience.

 

A senior official from Bank of India said that in some cases bank officials do not update the records because the due-diligence on the applicant is not satisfactory.

 

Source:https://economictimes.indiatimes.com/news/economy/policy/to-check-corruption-finance-ministry-directs-psbs-to-maintain-proper-loan-records/articleshow/9032603.cms



Learning

 0 Replies


Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register