IOB to involve SHGs in Direct Benefits Transfer, says its Chairman

The Indian Overseas Bank (IOB) is planning to involve the Self Help Groups (SHGs) in some of the activities relating to the ambitious ‘Direct Benefits Transfer’ scheme of the Central Government which would also bring the SHGs supplementary income, the IOB CMD M. Narendra said here on Sunday.

The bank has also taken initiatives to give a boost to retail credit and has tailor made schemes to meet the needs of different sections of the customers, he said.

Participating in an IOB credit disbursement programme here this evening, he said though districts in Tamil Nadu do not figure among the first lot of identified districts for direct benefits transfer to commence from Jan 1, these districts would be also be covered gradually. Under this programme, the beneficiaries of various government programmes would get the financial assistance directly credited to their accounts. The money could be delivered either through the Banking Correspondents (BCs) or withdrawn from Micro ATMs or through pre-paid cards according to the requirements.

The IOB CMD said a ‘massive work has to be done’ by the IOB staff with regard to the ambitious proposal for DBT scheme and he wanted some of the members of SHGs to take up the work relating to the scheme by becoming Business Correspondents. The bank was planning to appoint as many BCs as possible that would also provide the SHG members supplementary income.

Reaching Rural areas

Narendra said IOB was keen to reach out to the rural areas since its roots are in them. The bank had linked over 4.35 lakh members through the SHGs to whom the bank had lent nearly Rs 4,335 crore in Tamil Nadu and said ‘women are very much honest’ in loan repayment.

He said the bank had recently taken a lot of initiatives such as retail credit under which housing loans up to Rs 30 lakh were charged at 10.5 per cent interest that was the lowest that IOB could charge as this was the base rate. The interest rate for vehicle loans has been slashed from 14 per cent to 11 per cent. While jewel loan for agri purposes was charged at 7 per cent, for other purposes the interest rate had come down to 12 per cent from 14.5 per cent.

He said IOB took the lead in providing educational loans to students who got admission under management quota and also for students pursuing diploma courses or nursing course. The bank has an exposure of Rs 3,000 crore as educational loan. He said that in Tamil Nadu most of the loans are regularly repaid. At the function itself loans worth Rs 25 crore were disbursed today.

Recruitment drive

Narendra said IOB, which has already 189 Rural Development Officers (RDOs), is recruiting 300 more RDOs from different agricultural universities. It had recruited more than 7,500 staff members in the past two years and the recruitment drive would continue.

The IOB CMD advised the agriculturalists to not limit themselves to crop loans but take up other works such as land development, providing irrigation facilities, purchase of farm implements etc availing loans under investment credit facility to enhance farm productivity and quality of the produce. The bank, in a campaign conducted for this purpose, made a credit advance of Rs 616 crore.

Urban horticulture

He said the bank had also embarked on a scheme to support urban horticulture to improve greenery at homes by growing vegetables and developing flower-garden and loans for individuals up to Rs 2.5 lakh and up to Rs 25 lakh for institutions were given by IOB under this scheme.

G.V. Koorse, Chief Regional Manager, IOB-Coimbatore, said the urban horticulture scheme would address the issues of unemployment and under-employment in urban centres. The loan carried low interest rate.