The Hindu Business Line : RBI panel to examine paring agri credit rates

THE advisory committee on flow of credit to agriculture and related activities set up by the Reserve Bank of India will look into measures to reduce the rate of interest on agriculture credit given by commercial, co-operative and regional rural banks.

The committee, which was announced in the November 2003 Credit Policy, will function under the Chairmanship of noted economist, Prof V.S. Vyas.

The committee, which is required to submit its report by April 2004, is to examine among other aspects the norms relating to NPAs in cases of crop failure where seasonality and uncertainty are not captured.

The terms of reference of the committee are the following:

To assess the progress made in implementation of the recommendations of the expert committee on rural credit (Vyas Committee) appointed by Nabard in August 2000, to examine the role of Nabard as the apex institution for providing and regulating credit.

To study the role and improve the effectiveness of the Rural Infrastructure Development Fund scheme. The group will also identify the impediments in the flow of credit to the disadvantaged sections such as small and marginal farmers, tenant farmers, oral lessees and landless labourers and suggest measures to be taken by banks for providing financial assistance to them.

To suggest short-term and medium-term measures to improve the flow of credit to agriculture, with particular emphasis on direct financing of farmers based on linkages for supply of inputs and sale of outputs and institutional and procedural arrangements required therefore.

The need to modify the service area approach.

Feasibility for harnessing new technological developments in smoothening the process of credit delivery to the rural and agricultural sector.

The committee consists of the following members: Mr J.N.L. Srivastava, IAS (Retd), Dr N. Mohan Kumaran, former Director of Research, Kerala Agriculture University, Dr Sardar Singh Johl, former Vice Chancellor, Punjab Agriculture University, Mr P.S. Shenoy, Chairman and Managing Director, Bank of Baroda, Mr K.R. Ramamoorthy, former Chairman and Managing Director, Corporation Bank. Ms Ranjana Kumar, Chairperson, Nabard and Mr Vepa Kamesam, former Deputy Governor of Reserve Bank of India will be permanent invitees to the committee's meetings.

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