Color but no credit: the “mela” loan starts, but without ad hoc approvals

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If you were heading to a loan mela – much like a typical fair under a ceremonial tent – with a penalty and on-the-spot disbursement in mind, you were wrong. On the first day of the mega-deployment, more than three decades after a similar exercise, the promised Pan-Indian loan melas turned out to be customer outreach events to show that banks were ready to lend and were healthy, rather. as a window to get quick on-site approvals.

“This is a public awareness campaign, aimed at reiterating that banks are not shy about offering loans,” said Vijay Walia, managing director of Kolkata-based Corporation Bank. Pointing out that there was a perception that banks did not approve loans, he stressed that the lending was intended to deny this myth.

Although loan sanction letters were given to clients on the day of the launch of the mela in some 90 districts, most of them had already been underway for a few weeks at the branch level. Others had recently obtained approval in principle from the banks. Before the mela, public sector banks called customers who had applied for loans, telling them to collect their sanction letters from these camps.

Commercial standard Reporters visited several melas across cities to find that customers, who received letters of approval from banks on Thursday during these well-timed events, had applied for loans earlier at their respective branches.

The format followed by banks crossing neighborhoods was similar to each other. Consider this. A loan camp organized by Canara Bank in Delhi had a ceremony, in which customers were called to the stage and their respective banks handed them the sanction letters while announcing the amount and purpose of the loan. .

One of them was Shailendra Kumar Mishra who got a loan of around 1.5 lakh under Pradhan Mantri Mudra Yojana, from Bank of Baroda after applying for the loan a month ago. “I got a call from a BoB executive this morning to pick up the approval letter from this camp,” Mishra said.

The color and the music give a boost

If not under a marquee, some fairs are organized in town halls or local clubs. The traditional “Dollu Kunitha” dance (a form of folk dance in Karnataka) greeted Bengaluru bank customers as they entered the Jnana Jyothi auditorium on the campus of the city’s Central College. Besides the color and the hope of making money, there was also music. At the request of a branch manager of the Indian Central Bank, a client sang Gulabi Ankhen, a famous Bollywood song composed by RD Burman.

In order to make the event a success, PSB agency heads were asked to bring five clients to these camps and provide them with loans. The camps have failed to attract large numbers of new clients. “The attendance of walk-in clients was low. There are two reasons for this: some of these camps are held in community halls and secondly, the banks have had less time to publicize the mela loan, ”said a zone official from a PSB, under cover of ‘anonymity. He said banks did not receive a final list of sites to hold these camps until Monday. Bank officials said that while there was no aggressive mass advertising initiative, the banks ensured that their customers received letters and texts about the awareness campaign. Limited funds for advertising and promotions were cited as a constraint.

Identical application process

Meanwhile, the mela loan application process was no different from that of a bank branch. If a candidate comes with the necessary documents, approval in principle can be given within 59 minutes via the 59-minute MSME web portal, said Vijay Ranjan, Managing Director of State Bank of India Delhi.

“But before the final approval is given or the amount is finally disbursed, the bank, like all other participants, will follow its normal procedure and only then will the final disbursement be sanctioned,” he said. he declared.

“People think they can approach us and walk away with a loan. But we are dealing with public money and must also protect depositors’ money. We must therefore ensure that the bank does not go bankrupt and that depositors’ money can be repaid with applicable interest, ”said Walia of Corporation Bank.

According to Ranjan of SBI, the host banks bear the expenses of the camps. SBI, for example, spent around 3-4 lakh in each camp in Delhi. He added that banks want to send a message to the public that they are ready to meet their financial needs, especially during the holiday season. The message is also about the well-being of banks.

At the camp organized by the SBI in Nehru Place, the capital’s largest tech market, NBFCs such as Saija Finance, Paisalo Digital and Aadhaar Housing Finance joined in the fun. At other sites, private banks, including HDFC Bank and YES Bank, have contributed with their resources.

For the visitors, it was an opportunity to discover the best schemes and plans with the lenders. One of those people was Subhash Ghosh, who was seeking a loan of around 1 crore for the expansion of his two-year food processing start-up. During the day he visited all the booths to talk to the lenders. He plans to return to his finance team to pick up the best bet.

But 32-year-old Pramod Kumar had to leave the loan camp disappointed. He tried to explain his case for taking out a business loan from various lenders, but to no avail. “I have a clothing manufacturing business – operating both online and offline platforms and I am trying to apply for loans under various government programs, be it Startup India or Mudra. But the banks have set strict conditions to sanction a loan to a company like mine, ”he said.

Boost credit

  • Loan camps, or Grahak Mela Camps, to be organized in 400 districts
  • The first phase, to be held October 3-7, targets around 90 districts; the second phase will take place from October 21 to 25
  • Finance Minister Nirmala Sitharaman had asked banks to target five new customers for each existing customer in these camps
  • Camps take place either in tents or in community halls
  • Private banks and NBFCs also join PSBs in the program
  • On day one, banks claimed that hundreds of clients had received loans at these camps, but most of them were already being processed at the branch level.


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