It is disheartening to know that the overwhelming majority of the privately owned banks are unwilling to provide industries with much needed long-term loans though the fact is that new industries cannot be set up and older ones run without loans payable over a relatively longer period of time. The reluctance of the banks to disburse loans to the manufacturing units serves as a stumbling block to the country’s industrial process. This role of the private banks is completely at variance with the need of the time when the country is in dire necessity of generating employment opportunities through industrialisation as a measure to stave off adverse impacts of the corona pandemic on life and livelihood.
The development process of the country now stands at a crossroads and is unlikely to make further progress without a sound and widely expanded industrial base. The government with all necessary infrastructural and policy supports is trying its best to accelerate the industrialisation process. To make it happen, the government has also adopted the robust scheme of establishing a large number of special economic zones all over the country. The proposed budget also aims at creating jobs through setting up new industries. Now the banks, especially the private ones are required to play due role to advance the cause of the country.One of the most fundamental concepts of banking is that these financial institutions will gather idle money from the people and divert the same to trade, commerce and industries. The failure of the private banks in this respect is not only tantamount to deviation from its basic role but also leads to sluggish growth of the manufacturing, affecting the objectives of job creation and overall economic growth.
The private banks cannot be given free rein to go on with such a reluctant attitude that can only cause harm to the country’s industrial growth. These financial institutions have been given all necessary facilities; they are now duty bound to provide loans to industries and thus help the country’s industrial development. The central bank needs to play a stronger role so that the private banks cannot evade their responsibility.