State co-operative bank to give unsecured loans to jail inmates at 7pc interest: Maharashtra home minister

There will be no need for a guarantor. It will be disbursed on personal bond. The bank will decide the amount based on earning, skill, daily wages. As many as 1,055 jail inmates are expected to benefit

The Maharashtra government has decided to offer personal loans of up to Rs 50,000 to prisoners against their earning from work done in jail, state home minister Dilip Walse Patil said on Tuesday.

These unsecured loans from the Maharashtra State Cooperative Bank will carry an interest rate of 7 per cent, he said, adding that it will start as a pilot project in Yerawada Central Jail in Pune.

Such type of loan is called "khavti" loan, and the order on this scheme was issued on Tuesday, the minister said.

"There will be no need for a guarantor. It will be disbursed on personal bond. The bank will decide the amount based on earning, skill, daily wages. As many as 1,055 jail inmates are expected to benefit. They can use it to pay lawyer's fees, help kin etc. It is the first of its kind in the country," an official said.

The loan will also help strengthen family bonds as it will provide financial support to inmates and their kin, he added.

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