The government on Friday proposed to tap into the resources of scheduled commercial banks to increase the resource base of Nabard, Sidbi and National Housing Bank.

Presenting the 2008-09 General Budget in the Lok Sabha, Finance Minister P Chidambaram said the resources of the scheduled commercial banks should be tapped into to the extent that they fall short of their obligation to lend the priority sector.

He said financial inclusion can be taken forward by expanding the reach of these three banks. Chidambaram proposed to create a fund of Rs 5,000 crore (Rs 50 billion) in Nabard to enhance its refinance operations to short term cooperative credit institutions.

He also proposed creation of two funds of Rs 2,000 crore (Rs 20 billion) each in Sidbi, including one for risk capital financing, and another fund of Rs 1,200 crore (Rs 12 billion) in the NHB to enhance its refinance opgrations in rural housing sector.

The finance minister proposed to fix the borrowers' eligibility criteria as annual family income of Rs 18,000 in rural areas and Rs 24,000 in urban areas.

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