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The Hindu reported on 22nd June 2020 under the caption, ‘TN BJP creates website to help people get bank loans under central schemes’ saying that the TN state unit of BJP has set up a dedicated website to help persons get bank loans under various schemes instituted by the center to register themselves and submit applications. The portal has already received 20000 applications. The party says this will help applicants to do away with intermediaries and brokers. The party has deputed 5 workers each to its 60 districts to scrutinize applications to a question, “Will bankers not feel intimidated or pressured to provide loans as the applications are sent from a party in power at Centre?”. A party functionary who is heading this unit has stated, “We have two messages for the bankers- we are not pressurizing you and are only sending applications of deserving candidates. Ultimately, we tell them to scrutinize the applications thoroughly as per their processes and give loans based on merit of the applications”. Presently the party is calling applicants for an interview reported the paper.

Two years back when the party organised a mela for conducting interview and invited the bankers to attend, AIBOC instructed the officers not to attend and when a loan mela for MUDRA loans was organised with a central minister and the state BJP president attending the same, we held a demonstration outside the hall.

In September 2019, the Finance Minister instructed public sector banks that they should conduct loan melas called shamiana meetings in 200 districts from October 3 to 7 and in another 200 districts from October 11th. She also said that for every customer, banks will have to bring 5 customers. Banks followed and conducted loan melas. On December 3, the Finance Ministry announced that in October and November the banks have disbursed Rs4.91 lakh crores.

Now RBI and SBI are saying that the NPA on these loans sanctioned under the MUDRA schemes is increasing. The Finance Minister announced that banks will not classify loans to MSMEs as NPA.

This takes us back to the infamous loan melas of the eighties under the minister of state Mr. Janardhan Poojari who claims them as his biggest achievement in his website citing many stories which suits him.

Let’s have a glimpse of what newspapers reported during that time and later.

K.Bhanumathi wrote in India Today dated Oct 15,1984.

Loan seekers thronged many of 464 bank branches in Bangalore, threatening, abusing bank officials and damaging parked vehicles forcing officials to close the branches.

AICOBOO (out of which came AIBOC in1985) decided to stop loans till adequate protection was given and misconceptions about loans were cleared

Caught between politicking and electioneering, the loan-seekers were unaware of the terms when they accosted bank managers demanding their share. Some misconceptions were:

  • loans up to Rs 5,000 are given against ration cards for all with annual incomes less than Rs 3,000;
  • loans up to Rs 1,500 need never be repaid by the loanees;
  • loan disbursal would end by September 20, the day on which the last of the three melas scheduled for Bangalore (later postponed) would end;
  • Mrs Indira Gandhi sanctioned Rs 10 crore to be distributed in Bangalore as loans. (Mrs Gandhi during her visit to Bangalore last month had sanctioned Rs 10 crore for drought relief);
  • if Mrs Gandhi comes back to power, the loans will be waived.
  • AICOBOO state Chairman C. Gopinathan Nair said: “All along banks have been giving loans for the economically weak. Now thanks to the politicking and the mad rush, even the really needy are going to be denied help for the time being.”
  • Added an agitated AICOBOO secretary P.S. Rajagopal: “To weed out applications being submitted with bogus addresses; it was prescribed that applicants should produce ration cards along with loan applications. But the scheme degenerated into a card loan scheme with vote brokers taking the opportunity as godsend to secure loans.”
  • Although Poojary promised the distribution of loans worth Rs 3 crore to only 11,349 applicants, the number was far in excess of the 10,350 loans targeted as the quota for 207 branches in Bangalore for the first mela.
  • In addition, out of over 7,000 applications which poured into banks, following the mela, hardly 300 have received aid. Syndicate Bank Officers’ Association member, P. Ketilaya said: “Privately they (the loan-seekers) agree that the money is for tiding over family expenses or repaying old loans.”
  • Meanwhile, protest surfaced among bank employees. Most complained that they were betrayed and the mess was primarily because the top brass in banks were kowtowing Poojary’s line in order to secure promotions. Syndicate Bank Staff Union’s Deputy General Secretary U.S.A. Nayak said: “For the executives’ personal gain, so many people had to suffer.”
  • Swaminathan A Aiyar wrote in Economic Times on Sep 3, 2014 under the caption “Jan Dhan Yojana Has All The Characteristics Of Those Bad Old Loan Melas” as follows:
  • Public sector banks were forced to give mass loans in stadiums presided over by Congress honcho Janardhan Poojary. Later evaluation reports showed that loan beneficiaries were overwhelmingly non-poor. Politicians of all parties told borrowers not to repay. So, default was massive. The impact on poverty was negligible.
  • An article appeared in INDIA TODAY on December 31, 1987 written by Anita Pratap said: “Loan drama: Janata Party protests, but Karnataka Congress(I) chief Janardhan Poojary’s loan mela wins.”
  • Never has a loan mela been embroiled in so many controversies as state PCC(I) chief Janardhan Poojary’s for one lakh women entrepreneurs at Bangalore on December 5. Nor has any other loan mela had to overcome a campaign by the ruling Janata Party to scuttle it.
  • On December 5, Rs 30 crore was disbursed by 638 bank branches in a much publicized loan mela only for women. Burka-clad Hasina of Tannery Road, (one of the beneficiaries who plans to start a cloth business) said: “We’ve always been Congress supporters. This mela has strengthened our support.”
  • But hundreds of disgruntled women were seen streaming out of the gaily-decorated venue as they had been told that the money would be disbursed at the banks, two days later.
  • Said Jyothi of Madivala who walked out while Poojary was addressing the 60,000-strong crowd: “Who wants to listen to boring speeches?” Nevertheless, her vote she says will definitely go to Poojary.
  • One of the biggest scandals precipitated by this loan mela was that 85,000 loan application forms had been routed by the Syndicate Bank (the convener bank for the loan mela) through one individual – Congress ‘social worker’ Kan Kanady Sundar.
  • Former slum convener of the state PCC(I) for five years, Sundar, 56, said: “Poojary trusts me because he knows I am hard working and clean. I’ve been doing work for this loan mela for the past six months.
  • To the charge that the application forms had to be bought by the poor for sums ranging from Rs 100 to Rs 500, Sundar, displaying 15 meticulously-kept files, said: “All the details regarding the beneficiaries are in these files. You can choose people at random and check up with them whether they have paid any money for the forms.
  • Characteristically, Poojary chooses to disregard criticism and continues to repose faith in Sundar’s abilities to identify the poor. In the October 31, 1985 Bangalore loan mela, 12,000 of the 30,000 beneficiaries had come through Sundar; in the October 31, 1986 mela, 28,500 of 78,000: in the July 4, 1987 mela 10,170 of the 40,000; and in the mela last fortnight, 70,000 of the one lakh women entrepreneurs had come through Sundar.
  • Predictably the Janata Party is up in arms: party men were unable to even get the application forms. State party President M.P. Prakash says: “Surely there is a limit to the political mileage the Congress can get out of these loan melas.”
  • The decibel level of the anti-Poojary tirade increased sharply with the publication of the confidential minutes of a bank officers meeting held on November 4 and 10 to discuss the women’s loan mela.
  • The minutes demonstrate that Poojary had instructed the banks to make food and transport arrangements for the beneficiaries, that the applications received through the social workers should be given ‘top priority’ status, and that the no-dues certificates should be waived while granting the loans.
  • Several bankmen admitted that the loans were disbursed in total violation of RBI rules. Said a bank manager: “I would say RBI norms have been violated as no attempt has been made to assess the viability of the project – how can 200 people run cloth businesses in the same locality? Also, the credit-worthiness of the beneficiary is not assessed nor is the productive worth of the venture.” Janata sources claim the banks have spent Rs 2 crore in food and transport arrangements for the loan mela.
  • Prakash shot off a strongly-worded letter to R.N. Malhotra, RBI governor urging him to probe the loan mela as Poojary was “flouting RBI regulations to strengthen the organisational set-up of the Congress(I)” and that “application forms were given only to those people who were nominated by Poojary”.
  • Initially the Janata had planned to storm the venue with 15,000 loan seekers but abandoned this plan as the violence that would follow might have tarnished their image.
  • Consequently, on December 3, partymen held a series of demonstrations including one before the Syndicate Bank demanding that they be given 50,000 forms. They circulated a questionnaire to be filled by the beneficiary with questions such as ‘have you heard about Janardhan Poojary, if so your opinion about him? And if you get a chance would you vote for him?
  • Poojary insisted that the questionnaires had been concocted to tarnish his image. On December 5, just before he was to set off to the venue, he was gheraoed by the Yuva Janata activists who brought with them about 60 women seeking loans. 
  • Most of them like Annapoorni of Yeshwantpur and Lalitha of Jayanagar had been refused loans for no accountable reason other than the fact that their applications were not routed through Congress agents.
  • Janata activists also appealed to the High Court but no stay was granted. Party worker Narayana Rao said, “We tried everything to prevent this loan mela. Now we can only hope that rain will prevent it from taking place.” But even the rains did not oblige.
  • “The Janata Party was hell-bent on scuttling the loan mela because they realised how popular it is. They are scared because the Congress is working,” exulted Poojary. 
  • He claimed that no action could be taken on the loan application forms forwarded by the chief minister because they did not contain signatures or even the name of the bank branch from where the loan was sought to be obtained.
  • As to giving Sundar 85,000 forms, Poojary remarked: “He is a genuine social worker. The point is, if a Congressman mutualizes these forms I can take action, but if a Janata man plays mischief, I am helpless.”
  • Commenting on the allegation that the melas flout RBI norms, Poojary exclaimed: “The whole idea of the loan mela is to generate income for the poorest of the poor. So what if 200 cloth businesses are started in one locality? As for waiving no-dues certificates the bank managers have been asked to use their discretion. Why do you want to be so stringent with the poor?”
  • He admits that many of the loans will be used for consumption but adds that it is better for the poor to be indebted to a bank rather than to money-lenders. “Even a debtor is a respectable customer for the bank.” he says.
  • Last fortnight the Janata Party decided to hold state-wide dharnas to protest against the Poojary loan melas. Says Prakash: “We are not against loan melas but the unscrupulous and partisan manner in which it is conducted.” 
  • Poojary countered sarcastically: “Now that they realise that the programme is popular they claim they are not against loan melas. When we first started they did nothing but criticise the programme itself.
  • Asked whether he would go slow with his future loan melas, in view of the dust and din kicked up, an irrepressible Poojary said: “I draw courage from the people. I don’t care what the Janata does to scuttle this programme. Of course I will go ahead.” Barely had the sun set on the December 5 loan mela when he began processing forms for fresh loan melas to be held in Raichur and Bijapur next month.

Those days the Unions, Associations and political parties including DMK in Tamil Nadu protested against these loan melas. Later on, Service Area approach was brought by RBI and No dues certificate was insisted. The NPAs became double digit and it took one and half decades to salvage writes Dinesh Unnikrishnan in first post dated Sept 20, 2019 comparing the loan mela in 400 districts announced by Finance Minister.

Banks have to give loans and they are giving. But Banks are dealing with customers money. It is not given by government. If the loans do not come back which is what I myself has witnessed when loans are politicized, the banks will fail. Already a feeling has raised. When Mallayas, Chokshis, Modis, Adanis and Ambanis do not pay why should we pay.

It is time for the bankers, trade unions and political parties to stand up to safeguard public money. If this can happen in Tamil Nadu where BJP does not have much presence what will be the position in other state where they are ruling?

Thomas Franco is former General Secretary of All India Bank Officers’ Confederation.

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