Oriental Bank and India Post in pact for rural lending

Oriental Bank of Commerce on Tuesday signed an MoU with India Post to extend rural credit in Chandrapur and Warora districts in Maharashtra; and Mapusa, Vasco and Vadgaon districts in Goa

“In the pilot project, the bank will provide short-term consumption credit worth Rs 20,000 per beneficiary,” said Mr Ravi Taneja, Deputy General Manager, social lending and priority sector department, Oriental Bank of Commerce

“The loans will be collateral-free and not require a guarantee. The repayment period will be up to two years,” Mr Taneja added

Post-offices will identify prospective borrowers, assist in the filling up of loan application forms and forward them to the bank branch concerned for disbursement. The bank will pay a commission of Rs 600 per loan to India Post and also decide on the status of the loans

The post-offices will help in opening savings bank accounts for potential borrowers. They will assist in recovery of loans but will not be liable for defaults or any dispute arising between the borrower and the bank

“The postmen who understand the local flavour and are acquainted with the local people will be deployed for the execution of the scheme,” said Col. K.C. Mishra, Postmaster General, India Post

India Post is already working with Corporation Bank in Goa. It also has an agreement with Union Bank of India and plans to sign MoUs with Dena Bank and Bank of Maharashtra