Kerala CM pulls up banks for cold shouldering diaspora returnees

Chandy urged the banks to adopt a liberalised approach to the scheme, which was launched following the new labour policy introduced by the government of Saudi Arabia to ensure job opportunities to the locals in 2013.



By T.k. Devasia

Published: Tue 23 Jun 2015, 11:18 PM

Last updated: Wed 8 Jul 2015, 2:59 PM

Trivandrum: Kerala Chief Minister Oommen Chandy on Monday came down heavily on the banks for not cooperating with the government in implementing its scheme for the rehabilitation of the diaspora who return to the state.

Speaking at the state-level bankers committee here, he said that banks were generally showing reluctance to provide loans to returnees selected under the scheme to launch small-scale projects under various sectors.

Chandy urged the banks to adopt a liberalised approach to the scheme, which was launched following the new labour policy introduced by the government of Saudi Arabia to ensure job opportunities to the locals in 2013. The state government had widened the scope of the scheme following return of large number of people in the wake of conflicts in Iraq, Syria and Yemen. The scheme provides for subsidised loan to all those who have returned after working abroad for two years to start group or individual self-employment ventures with a capital investment of up to Rs.2 million. The State Non- Resident Keralites’ Affairs Department is providing Rs300,000 towards this as subsidy.

The interest rate for loan repayment was set at three per cent less than the rates approved by the Reserve Bank of India (RBI). Although over 20, 000 people registered for the scheme, only 7,194 people actually appeared for the initial screening. Though all banks and financial institutions under the control of the government had agreed to participate in the scheme, only Canara Bank and United Bank of India came forward to provide loans. The other banks did not show any interest in the scheme.Norka has so far paid Rs40.8 million as subsidy for the 605 self-employment projects. The government had hoped that the scheme would have heralded a major change in the self-employment sector in the state as it considered returnees who had acquired new skills and experience in various sectors as a big asset.

Banks have been cold-shouldering the scheme despite a quantum jump in the NRI deposits in the banks. The banking statistics released at the meeting on Monday showed that the NRE deposits in the banks had touched a record Rs1096 billion in the last fiscal. State Bank of Travancore recorded the maximum deposit of Rs266.13 billion, followed closely by Federal Bank with Rs232.14 billion.


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