Demand for new bank branches are rising: FM

Finance Minister P Chidambaram on Friday said there was a rising demand for opening bank branches and expressed confidence the bankers would respond positively to it.

"Bank branches are important for many reasons. People complain that they cannot open their bank account … if there is no bank branch say within 10 kilometre how do you open a bank account," Chidambaram said while inaugurating 300 new branches in Uttar Pradesh.

"Without bank branch how do you reach to the people to mobilise their savings. I am very happy that now there is a rising demand to open a bank branch in our towns and villages. I am sure that the bankers will respond to it," he added.

On an average, about 6,000 branches were being opened every year in the last 2-3 years, Chidambaram said.

"I am sure that in 2013-14 all our banks will open a large number of branches. In UP alone there is a plan to open another 2700 branches. If you can do it in UP, you would be able to do at least 10,000 to 12,000 branches all over the country. I want all the bankers to put their best efforts to achieve the target," he said.

Chidambaram said UP was an important state.

"In many ways UP's development and progress would determine India's development and progress," he said.

Chidambaram said that there would always be some national average and some states would be below it and some above it.

"...It is the rise of the average that will make India a strong country," he said.

The Union Minister said the central government pays special attention to states that are below the average.

"Which is why I said in my budget speech that the parameters for deciding backwardness must change," he said.

He said that the central government does not discriminate among states.

"We want all of India to grow and specially we want poor states and underprivileged to grow because while they grow, whole of India grows," he said.

He expressed confidence that by March 2014, every branch would have an ATM.

Chidambaram said the attitude towards extending loans must change. "When we give loans we are not giving charity. The right to loan is like right to free speech and any other right," he said.

"I want all the people to believe that if you are eligible, if you are qualified and have the capacity to repay then you have right to get loan and it is bankers duty to give it," he added.

On education loan, the Minister said as compared to some years ago when few got it, during the last six-seven years it had gone up substantially.

As many as 25 lakh students availed of such loans till December 2012, with the total amount outstanding at Rs 50,000 crore (Rs 500 billion).

"I want more and more students to apply for education loan as education and advancement of knowledge will build the country," he said.

Chidambaram said UP has large financial needs.

"This morning, the CM (Akhilesh Yadav) and officials sat with me and went over a number of proposals. I promised them that when I get back to Delhi I would look into each of the proposals. In about one or two weeks we will be able to get an idea where the proposal stand. After that I will invite the CM to come and meet us in Delhi," he said.

He said that UP's annual plan was rising every year.

"It was Rs 42,000 crore (Rs 420 billion) in 2010-11 and Rs 57,800 crore (Rs 578 billion) in 2012-13. UP is a big state and the more we will be able to spend from planned expenditure that is good for the state," he said.