Banks in Madhya Pradesh are scrambling to boost lending to street vendors in a bid to bolster numbers ahead of a visit this week by Prime Minister Narendra Modi, according to sources and letters seen by Reuters.
A scheme that is part of a coronavirus relief package launched this year offers collateral-free loans of ₹ 10,000 to help an approximately 50 lakh street vendors, but state-run banks mired in bad debt have been hesitant to lend.
The Bank of India told some senior employees in a letter, in light of PM Modi’s visit, “All bank branches in the state need to immediately accept all applications submitted under the street vendor scheme and disburse loans without delay.”
One banker at a state-run bank said, “There is so much pressure from the government and senior management to sanction these loans right now that the due diligence process has gone for a toss.”
