Canara Bank bullish on lending to SHGs: CMD

Canara Bank is bullish on lending to women self-help groups and in contributing to the cause of women's empowerment and this is also a good business as the recovery rate is excellent, according to Mr S. Raman, the Chairman and Managing Director.

He told reporters here on Thursday that the bank has lent more than Rs 1,000 crore to SHGs of women in the country and that “Andhra Pradesh in particular is in the forefront. It is a sort of silent revolution and it is not confined to one part of the country.”

Later, Mr Raman participated in a convention of SHGs of women. Credit linkage was given to 1,600 self-help groups at the convention; the credit disbursed was Rs 30 crore. He said Canara Bank has formed 37,236 groups and financed them.

Mr Raman said the recovery rate was excellent in the range of 95-100 per cent. He dismissed the criticism that SHGs were only using the credit given to pay off the money they had taken from private money-lenders, and that it was not being used for any income-generating activity. “It may be true to some extent. Even if it were true, there is no need to discount the importance of the programme. After all, the women are making good use of cheap bank credit to pay off costly private loans. But in fact many SHGs are putting it to productive use,” he explained.

Total credit given

He said 16 per cent of the total credit given by the bank had been sanctioned to women and the percentage would go up in future.

Mr Raman said the bank was making a concerted effort to bring down the NPAs which are at 1.41 per cent (net), and in the current financial year Rs 2,400 crore was recovered. The total amount recovered would go up to Rs 3,000 crore by the end of the fiscal, he added.

In response to a question, he said the bank has not lent to Kingfisher Airlines and “in general we keep clear of such things. We have no exposure.”

He said the bank had 249 branches in AP and one more would be added soon. The bank intendes to add fifty more in the next few years.