Complaints of loan denial flood National Commission for Minorities, UP tops chart

NEW DELHI: The National Commission for Minorities has received over hundred complaints, alleging that minorities are not getting loans from banks — both public and private ones —due to their identity, sources said.

Taking note of the problem and the fact that most complaints have come from Uttar Pradesh, the NCM is holding a meeting in Lucknow on March 19th with senior officials of RBI, Minority Affairs Ministry, UP government and the leading banks in minority-dominated districts of UP.

People in the know, who did not wish to be named, said most complaints have come from the Muslim community, who are one among the six notified minorities in the country. The meeting was proposed by NCM secretary JRK Rao to the RBI’s Lucknow head on February 27.

Uttar Pradesh has 21 minority concentrated districts and it also has the largest population of Muslims in the country. Other notified minorities in the country are Christians, Sikhs, Buddhists, Parsis and Jains. Complaints pertain to availing all kinds of loans —working capital loan, corporate term loan, term loan and government’s various loan scheme such as the Startupindia, Mudra loans etc, they said. Sources added that complaints have come from all across the country but most are from Muslim dominated areas.  

A senior official in the government said, “Access to credit for minorities is a big issue. There have been more than 100 complaints about it in 2018 alone. Therefore, this meeting has been called to assess the situation. The Prime Minister has been pressing for welfare of minorities. Lending loans to minorities is also an important component of PM’s 15 point programme for the welfare of minorities.”

The official added that complaints of “discrimination” against minorities are being reported despite existence of clear government guidelines to ensure smooth flow of bank credit to minority communities.

In July 2017, RBI had issued a detailed circular for the purpose directing all scheduled commercial banks to appoint one dedicated officer each in all the 121 Minority Concentrated Districts (MCDs) of the country to exclusively monitor credit flow to minorities in each of the district.

NCM chief Syed Ghayorul Hasan Rizvi, who heads the NCM, confirmed the development but refused to give details.

However, a senior ministry official who will attend the meeting in Lucknow, said more such meetings will be held in other states too which have a large number of MCDs such as Bengal, Maharashtra, Tamil Nadu, Telangana etc.

Most complaints from BJP-ruled UP

• NCM has received over 100 complaints from minorities saying, they have been unable to get loans from banks—both public and private.

• Maximum complaints have come from BJP ruled Uttar Pradesh which has the largest population of minorities in the country.

• Complaints pertain to availing all kinds of loans — working capital loan, corporate term loan, term loan and government’s various small business loans scheme such as Mudra scheme.

Loans explained:

• The working capital loan is the money one may need to meet their day-to-day business expenses. The loans are offered typically for a 12-month tenure and have an interest rate of 12 per cent to 16 per cent.

• Corporate term loans are used to start a venture or expand a business. These loans are secured (company assets) and have a longer tenure and the interest rate is negotiable.

• Term loans are used to buy fixed assets. Typically, these loans are secured with tenure of 1-10 years and a floating interest rate between 10 and 20 per cent.