(From left) Uco Bank chairman V. Sridar, RBI deputy governor Usha Thorat, Indian Bank chief K.C. Chakraborty in Calcutta on Saturday. Picture by Kishor Roy Chowdhury

Calcutta, Nov. 12: The Reserve Bank of India today turned the heat on commercial banks to make a clean breast of their borrowers ? both corporate and retail. The central bank wants details to be supplied to the Credit Information Bureau (India) Ltd or Cibil so as to plug the leakage in the banking system. If the banks fail to furnish the details, RBI may also think of imposing some sort of a penalty.

Usha Thorat, the newly-appointed deputy governor of RBI, who was in the city to address BanCon 2005, said, “Banks should reveal the details of their entire gamut of borrowers. It should be 100 per cent.” She was replying to a question raised by a banker.

H.N. Sinor, who is the chief executive of the Indian Banks’ Association, said, “RBI, in a way, is putting pressure on banks to disclose details about their borrowers. This is being done to check further slippages.”

Cibil is a repository of information that contains the credit history of commercial and retail borrowers. A host of public sector, private sector and foreign banks are stakeholders of Cibil.

Taking a cue from RBI governor Y.V. Reddy’s proposal of no-frills account, Thorat today spoke about the financial inclusion of the poorer section of the society. “The banking system in India does not encourage a particular section of the society (read poor). This has to be changed and there should be financial inclusion of all the members of the society,” she said.

Nachiket Mor, executive director of ICICI Bank, said low income customers require full range of services, credit, transaction, banking, investment and risk mitigation.

He spoke about deeper penetration of markets with a variety of channels to access this section of society. “One way of reaching out to the poorer section of society is through franchisees and Internet kiosks,” the ICICI Bank official added.

In recent years, ICICI Bank has been focussing on rural credit. The bank is working with micro-finance groups for financing the rural sector.

“We are also talking to the Registrar of Co-operative Societies to allow us to work with co-operative banks to expedite flow of credit to rural India. Till date, banks are not allowed to work with co-operative societies for lending to the rural sector,” Mor said.

ICICI Bank has lent Rs 7,500 crore in the first six months of the current fiscal towards agriculture.

Small farmers

In the face of a significant rise in the country’s agricultural credit in the last decade, a need to formulate a credit policy, particularly for small and marginal farmers has been mooted.

C. Rangarajan, who is the chairman of the economic advisory council to the Prime Minister, said the target of directing 18 per cent of net credit flow to the farm sector has not yet been achieved and there is a need to formulate a credit policy for small and marginal farmers.

In the last 10 years, credit flow to the farm sector had increased from Rs 5,400 crore to Rs 6,000 crore, Rangarajan said in his speech that was read out in absentia at BanCon 2005.