Pappu Kumar alleges that the bank discriminates against small applicants. While his small loan application is being strictly scrutinized, the bank waived off Rs 44,481 crore of bad debts (NPAs) of 144 corporate companies in the last 8 years, which included many rich and influential borrowers. This difference shows that the bank is not treating the poor and Scheduled Caste youth fairly, which is against RBI rules.
Rohtas- Many schemes are running on paper to provide employment opportunities to the deprived and marginalized community, but do the Dalit and backward class youth get the benefit of it in reality? Probably not! One such scheme is the ‘Suvidha’ loan of National Scheduled Caste Finance and Development Corporation (NSFDC) under which various types of loans are provided to economically empower the Scheduled Caste persons.
“Suvidha Loan” provides financial assistance to Scheduled Caste individuals to start small business or expand existing business. In the hope of self-employment, two youths from Bihar have been visiting Bank of Baroda for the last three months to get this loan, but despite being eligible and fulfilling all the documents, the bank refused to give loan to both of them.
Pappu Kumar, a resident of Mauna village in Bihar, has filed a formal objection against Bank of Baroda (BOB) with the Reserve Bank of India (RBI), in which he has accused the Bank of not following the guidelines of the National Scheduled Caste Finance and Development Corporation (NSFDC) and discriminatory behavior. Pappu Kumar, an unemployed Scheduled Caste youth with an annual family income of Rs 1.25 lakh, had applied for a commercial vehicle loan under the NSFDC Suvidha Yojana on March 28, 2025.
Pappu said the bank’s Dehri on Sone branch discriminated and harassed him, deliberately delayed disbursing loans and arbitrarily rejected applications, undermining the scheme’s objective of promoting financial inclusion and self-employment for marginalised communities. Vikas Kumar also has a similar complaint.
NSFDC, a central public sector enterprise under the Ministry of Social Justice and Empowerment, has a scheme under which Scheduled Caste individuals with annual family income up to Rs 3 lakh can apply for loans. The applicant is provided loans up to Rs 10 lakh for small business activities, commercial vehicles such as jeeps and car taxis, without any collateral/security requirement or assessment of repayment capacity based on the applicant’s current income.
Pappu and Vikas Kumar had applied under this scheme. Pappu told The Mooknayak that he had applied for a loan on 28-03-2025 to purchase a Tata Tigor XT CNG model for self-employment/business. The scheme provides loans at subsidized rates for purchasing vehicles, which he wanted to promote self-employment.
Pappu says the BOB branch manager initially insisted on submitting income tax returns, which is not required under NSFDC guidelines. His application was accepted only after repeated clarifications.
Despite submitting the application, the bank kept the loan “in process” pending for two months without any valid justification and kept citing vague reasons like approval from higher authorities. When he filed an RTI application to clarify the reasons for the delay, he received an incomplete and misleading response, which further strengthened his allegations of caste-based discrimination and misuse of position.
Pappu argues that the bank’s actions violate NSFDC’s mission to promote prosperity among the Scheduled Castes through financial assistance and skill development initiatives.
Similarly, the bank expressed its inability to give a loan to Vikas Kumar, writing that Vikas’s annual income is Rs 1.25 lakh and he has applied for a loan of Rs 8,90,689 for a commercial vehicle. As per the bank’s guidelines, loans are given only up to three times the income. In such a situation, the bank said that Vikas can be given a loan of only Rs. 3,75,000/- as per three times his annual income. If he is given a loan for seven years (84 months), then according to this, the average EMI will be Rs 12000 to 15000, whereas Vikas’s average monthly income is Rs 10416/-. The bank wrote in its letter, “According to this, you do not have the repaying capacity, so we are unable to approve your loan as per the above documents and bank guidelines.” The applicant says that the bank misrepresented his loan application by processing it under the agricultural finance conditions in a wrong manner, which is inconsistent with the objectives of the NSFDC scheme. The NSFDC framework evaluates repayment capacity not based on the applicant’s current income but on the expected income from the proposed venture such as commercial vehicle operation. Kumar estimates that a self-employed taxi driver can generate an income of Rs 25,000 to Rs 30,000 per month, which can easily cover the EMI of Rs 15,000-16,000, yet BOB neither approved the loan nor considered this income possibility, but applied business loan norms that are inappropriate for this scheme.
Pappu Kumar has made several serious allegations against Bank of Baroda (BOB). He says that the bank changed the terms of his loan, breaking the rules of NSFDC (National Stadium Finance Development Corporation). According to NSFDC, the loan repayment period should have been 66 months, but the bank increased it to 84 months. Also, the bank offered him loans at normal commercial rates instead of subsidized low interest rates (4-6%), which increased his financial burden.
Kumar also alleged that the bank discriminates against small applicants. He said that while his small loan application is being strictly scrutinized, the bank waived off Rs 44,481 crore of bad debts (NPAs) of 144 corporate companies in the last 8 years, which included many rich and influential borrowers. This difference shows that the bank is not treating the poor and Scheduled Caste youth fairly, which is against RBI rules.
Kumar has demanded RBI to direct BOB to approve his loan of Rs 8.91 lakh on NSFDC terms. He should be compensated Rs 8.91 lakh for financial loss and Rs 1 lakh for mental stress. RBI has been demanded to take action against the wrong practices of the bank and implement the NSFDC scheme properly.
Courtesy: Geetha Sunil Pillai, Hindi News