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Money
'Banks Hesitant to Give Collateral Free Loan' - Vinod Thapar, President of Knitwear Club, Ludhiana
Rishi Sonwal
Jan 2011
Jan 2011
Page 1 of 2
Though the government has been talking about the collateral free loans but the ground reality is different. Banks are not willing to give the collateral free loans to small units or new start-ups. They may be giving some approvals to show the viability and working of the schemes for collateral free loans but the actual scene is that no bank wants to give collateral free loan. All the banks, be it public sector or private sectors, always avoid to give collateral free loans. My personal view is that the banks people fears of the recovery and possible threat to their own job if the recovery was not done.
These are the remarks given by Vinod Thpar who is the President of Knitwear Club, Ludhiana and also the Managing Director of Thapar Hosiery Mills (P) Ltd. He was addressing a conference organized by Axis Bank in Ludhiana recently.
Thapar said that the banks must have the liberal views. They must follow the Credit Guarantee Scheme which was not given prior importance by the banks.
Subtle Mechanism
He raised the issue of hectic paper work and subtle mechanism in sanctioning of the loans by the banks. He said, “Banks must simplified the paper for sanctioning the loan to the units and also the mechanism must be entrepreneur-friendly.”
Thapar expressed his concern about the hidden charges to get the loan. “It is a general perception in knitwear industry that there are too much hidden charges in private sector banks. I would like to say to all the banks, be it public sector or private sector, that if they want to get business from Ludhiana knitwear industry, then they must avoid levying the objectionable charges. Nationalised banks must also come up with this way.”
President of the Knitwear Club suggested some solutions to improve the situation. He said, “Banks are needed to be motivated to give credit to the micro and small sector. The government must take initiatives to encourage the banks. Our (knitwear industry) is not getting sufficient credit from banks. Role of bank managers are crucial. They often fear of the recovery.”
'Axis Bank is aTransparent Bank'
Thapar, however, hoped in Axis Bank. “I understand that Axis Bank will be able to curb the problem related to the speedy approval of the loans and hectic paperwork. Axis Bank has better credit approval mechanism than other private sector banks. I personally have observed this bank. This bank is very transparent about the hidden charges. This bank levies the charges in customers' notice.
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