The Hindu Business Line : Banks filing monthly reports on agri-lending

"The banks would now take the issue more seriously. Earlier, their representatives often did not even show up at our periodic review meetings. With data being filed on a monthly basis now, there will be a greater sense of urgency to meet targets. It would also help us in identifying and resolving their problems," a Nabard official said.

Ahmedabad , Aug. 23

PUBLIC sector banks have started sending monthly reports on advances made to the agriculture sector following the Government's directive to double farm credit.

"The Government had announced in June that commercial banks should direct at least 18 per cent of their net credit flows to the farm sector. In order to streamline the process, we had asked the banks to send in monthly reports. They have started filing these reports on a monthly basis from July this year," a top National Bank for Agriculture and Rural Development (Nabard) official told Business Line here.

The Finance Minister, Mr P. Chidambaram, has called for a special meeting on September 9 to review the flow of credit to the rural sector.

Nabard hopes that nationwide monthly reports would be available by then and the institution would be in a better position to assess the credit flow situation.

(Nabard is the nodal body for agriculture and rural development credit and acts as the central bank for co-operative banks).

"Given the double whammy of a drought followed by floods that have ravaged crops in several parts of the country, the Government is keen that farm sector lending should be stepped up. The silver lining is that the rabi (winter) crop would be better thanks to a good monsoon and farmers would be able to take a second crop in several areas where there is normally a single crop in a year," the official said.

According to the Finance Ministry, only a handful of PSU banks and three private banks could achieve the 18 per cent target last year. The PSU banks that made the grade include Allahabad Bank, Indian Bank, Indian Overseas Bank, Punjab National Bank, State Bank of Indore, State Bank of Patiala and State Bank of Saurashtra. The private banks that met the target were ICICI Bank, Ganesh Bank of Karudwadi and SBI Commercial Bank.

The aggregate outstanding agriculture advances of PSU banks at the close of financial year 2003-04 stood at Rs 86,681 crore, or 15.58 per cent of their total advances. For the current year, the Government plans to step up agriculture sector lending by at least 30 per cent.

For Gujarat, the official said that the average credit flow to the farm sector was expected to increase 32 per cent during the current year. As against Rs 4,600 crore disbursed in 2003-04, the target for the current year was Rs 6,091 crore, he said.

The 3,760 rural and semi-urban branches of commercial and rural banks in the State have been asked to add at least 100 new customers each, which would enable 3.76 lakh farmers to take bank credit. At an average disbursal of Rs 25,000 per borrower, it would bring Rs 940 crore worth of new business for banks in the State, the Nabard official said.

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