The Hindu Business Line : Biometric cards for Reliance Fresh vendors

Mumbai, April 3 Union Bank of India and FINO have enrolled 1,600 vegetable and fruit vendors who are regular suppliers to Reliance Fresh. These vendors will soon be issued biometric cards using which they can avail themselves of small loans from the bank.

The project will be launched in Gurgaon on a pilot basis, said Mr Laxman Rao, general manager, priority sector.

The bank has enrolled 1,200 hawkers from the Chandni Chowk area in Delhi and has given loans of up to Rs 65 lakh under two products — Saubhagya and Bhagya. These loans are in the range of Rs 15-20,000 and the repayment amount is about Rs 200-300 per week. The rate of interest works out to 12 per cent per annum. The scheme for the vendors of Reliance Fresh will follow the same lines.

In the first tranche, each vendor will be given loans of Rs 5,000 each and depending on the response, the amount will be increased.

Cash flow assurance

Reliance will not provide guarantee of repayment, but the association of a large corporate house does give a certain moral guarantee, Mr Rao said. For the corporate, the advantage is the assured cash flow for their vendors through the bank loans, which in turn will ensure that the supply to their stores is not hampered.

In any case, the level of defaults is very low, given FINO’s high recovery track record, Mr Rao added.

Loans to NDDB farmers

The bank has also distributed cards to 44,000 farmers affiliated to National Dairy Development Board and given loans for purchase of buffaloes in Junagadh in Gujarat, Chittoor in Andhra Pradesh and Nanded in Maharashtra.

Union Bank has enrolled 15 lakh accounts through biometric cards and more than 12 lakh cards are in the distribution stage. In all, the bank has disbursed loans worth Rs 1.06 crore under Bhagya, Saubhagya and the NDDB scheme, Mr Rao said.

The bank is also trying to introduce remittances between Mumbai and eastern Uttar Pradesh and Tamil Nadu through biometric cards. These could be card-to-card transfers or card-to-account transfers. The rates will be lesser than that for money order and will target the migrant labourer population in Mumbai, Mr Rao said.

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