Bankers are expected to be typically hardnosed; bothered only about their net interest margins and profitability of loan portfolios. Caring for the esoteric — urban greening, roof-top or kitchen gardens — are not exactly in their books.
But Indian Overseas Bank is just doing that; nurturing a boutique loan scheme for urban horticulture. M. Narendra, CMD of IOB, told Business Line that the bank was currently running a campaign for the scheme that has retail flavour but priced as an agricultural loan.
“With an interest rate of 11.75 per cent, the margin-free (up to Rs 1 lakh) and collateral security-waived loan scheme is unique for urban individuals interested in raring flower or kitchen gardens or for landscaping on his or her property,” Narendra said.
For institutions, however, collateral security of 50 per cent of the loan amount is required.
Though launched in 2009, the scheme has been given an aggressive marketing all across the country recently. “We began a campaign on November 15 and it will continue till December-end. I am criss-crossing the country for it,”, said the CMD.
In Kolkata, 63 applications were processed in the past fortnight for disbursing Rs 1.74-crore loan. Many of the borrowers are corporate entities. “It still is a tiny portfolio, but with a flowering promise to become big”, quipped the banker.
From Rs 18.52 crore in May this year, the disbursement under the scheme has gone up to around Rs 96 crore, said Biswanath Bandyopadhyay, Assistant General Manager, Agriculture and Rural Initiative Department of IOB.
The state-owned bank with a current NPA (non-performing asset) rate of 3.87 per cent, mainly in its exposure to textiles and steel industries, is looking for a fresh breath of air in the relatively less risky farm loan space.