Balanced growth needed

 Financial institutions in Nagaland have been the topic of debate in the past especially on their willingness not to finance loans. All banks in Nagaland have approximately around Rs.1,00,000crore deposits out of which hardly 30% have been given as loans under various schemes and projects. The CDR ratio is quite high and it is time to re-infuse capital for economic activities. The issue of loans and mortgage also came up in the recently concluded assembly session especially over the merit and demerit of implementing or not implementing the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002. The Act in question was also amended in 2019 and in perspective, the entire Act seeks to regulate and restructure the aspects of loans vis-à-vis security and mortgage issues etc. For Nagaland and other tribal states (or areas under Sixth Schedule) in the region, what is of crucial importance is on the issue of banks taking over mortgaged lands or properties provided as collateral for loans in case of default of loans. In the assembly discussions on the matter could not satisfy the opposition. However, the leader of the house and chief minister had informed the house that the Act was not acceptable or applicable to Nagaland over the issue of auction of mortgaged lands or properties of indigenous inhabitants of the state. What has been suggested is that since ownership of land and its resources forms part of the larger clauses under Article 371A, non-indigenous buyers of such lands or properties through bank auction would violate the protection given to the indigenous people. In other words, if allowed to be implemented in its current form and without any amendment with respect to the constitutional protection; in a not so distant future, it could also lead to indigenous tribes and communities in being alienated from their lands. The role of banks in economic development cannot be under stressed. It is the oil that drives the engine of economic development. There had been several debates over this issue and each have their own logic and so one cannot subsume the other. The issue of some inhibition on the part of financial lending institutions towards local entrepreneurs has several factors. While local entrepreneurs claim that banks do not show the same willingness or enthusiasm to lend money to them in contrast to what is shown to other non-local traders and business persons; the banks also have their tales. One of the tales of the banks is that in other areas beyond the cadastral areas of Dimapur, it is almost impossible to confiscate/seize mortgaged land properties etc unless a law on this is passed. However SARFAESI Act which aims to do just that would also not be in the interests of the indigenous people. Besides this matter, at one time Entrepreneurs Associates from Kohima had also alleged that banks in Nagaland were not interested to give loan to local entrepreneurs. The so-called ‘bias’ against local entrepreneurs needs to be seriously looked into as the two sides have to meet at some point. Banks need to be made people-friendly in these days of global business while local entrepreneurs must also accept they also need to upgrade themselves about banking and business innovation. On its part, the government should be pro-business while also playing the role of custodian of rights of the indigenous people.