No collateral required for loans to SC/ST: Mukherjee
New Delhi: The government Friday said the
provision of collateral security for getting loans from banks
has been waived for SC/ST as part of measures to grant them
easier access to credit.
"There is no need for collateral security for these
sections for getting bank loans," Finance Minister Pranab
Mukherjee told the Lok Sabha while replying to supplementaries
during the Question Hour.
He said banks should not insist on deposits while
considering loan applications under government sponsored
poverty alleviation schemes/self-employment programmes from
borrowers of these (SC/ST) communities.
In case of rejection of loan applications of SC/ST, it
should be done at the next higher level instead of at the
branch level indicating proper reasons for rejection, he said.
Mukherjee said banks have been asked to create greater
awareness among SC/STs in order to encourage them to access
"Field staff should contact such borrowers to explain
schemes and their advantages," he said.