January 28, 2023


The Number One Source For Business

Karnataka government grants aid, banks deduct it for loans taken | Bengaluru News

BENGALURU: Reeling under severe financial strain caused by the lockdown, Kumar H, a street vendor, was relieved when chief minister BS Yedyiurappa announced a relief package for various categories of workers, including people like him.
But Kumar’s relief was short-lived. Although the state government credited the promised Rs 2,000 aid into his bank account, the bank promptly debited the sum towards a pending loan instalment.
Kumar, 38 and a resident of Srirangapatna in Mandya district, had been provided a loan of Rs 10,000 by the Centre during the first wave, which he is still repaying.
Kumar is among at least 95,000 vendors who continue to remain in distress despite the state government’s relief package announced during the lockdown recently.
The one-time aid provided by the Karnataka government has been debited by banks towards various loans, including central government aid schemes.
Kumar, who ran a fastfood shop in Srirangapatna, said that during last year’s lockdown, his earnings were nil and under the Prime Minister Street Vendors Atma Nirbhar Nidhi scheme, he was provided a loan of Rs 10,000.
“Post the lockdown, I restarted my business and repaid six monthly instalments of Rs 1,000 each to the bank,” he said.
But the second wave of Covid-19 infections and subsequent restrictions hit Kumar, who has been in the business for eight years, really hard.
“I earned about Rs 15,000 every month before the pandemic struck and about Rs 10,000 went to house rent, groceries and other expenses. Whatever little savings I had was also exhausted to make ends meet during the lockdowns. I don’t know what the fate of my family will be even after 10 days,” he said. Kumar’s wife is a homemaker and 14-year-old son is a class 9 student.
Same-day deduction:
Kumar said he received an SMS alert when the state government credited Rs 2,000 into his bank account. But when he went to withdraw the money, he realised that it had been debited. “I checked with the bank and they told me that it has been debited towards the loan I had availed under PM SVANidhi Scheme,” Kumar said.
Anzar Pasha, 52, a resident of Padarayanapura in Bengaluru, sold clothes on pavements in Gandhinagar and had not availed any loan under any Central scheme during the lockdown last year. But he had borrowed Rs 50,000 from the bank and was repaying Rs 1,500 every month until the lockdown was imposed.
“I received the state government’s aid, but it was deducted the same day towards the loan I had availed. I am surviving on ration kits provided by volunteers and donors,” Pasha said.
The Federation of Karnataka Street Vendors Association said there are more than five lakh street vendors in the state but only 2.2 lakh are registered with the association. The government has released the one-time payment of Rs 2,000 to about 1.9 lakh vendors. At least 95,000 have availed loans under central government schemes or from banks during the nationwide lockdown.
ES Rangaswamy, president of the association, said the state government disbursed the relief under the department of skill development, entrepreneurship and livelihood.
“After several beneficiaries said banks had deducted the cash towards repayment of various loans, we approached the chief minister and apprised him of the problem. He too asked banks not to deduct the money as vendors are in great financial distress. However, it was of no use as banks say that the deduction towards loans happens automatically once money is credited into the accounts,” he said.