The Hindu Business Line : SLBC seeks review of model of financing

Good recovery The SLBC President and Andhra Bank Chairman and Managing Director, Mr K. Ramakrishnan, said banks in the State were comfortable in financing SHGs.

Hyderabad , March 19

The State Level Bankers Committee (SLBC) of Andhra Pradesh has urged the State Government to review its proposal on new model of financing village organisations (VOs) and self-help group (SHG) federations.

Addressing the SLBC meeting here on Friday, the SLBC President and Andhra Bank Chairman and Managing Director, Mr K. Ramakrishnan, said the banks in the State were comfortable in financing SHGs and there has been good recovery.

Referring to the State Government's proposal on the new model of financing, he said, "However, we are of the view that we have to give greater thought for financing the VOs as the present system of financing SHGs is going smoothly in our State."

Further, the Andhra Bank CMD has urged the Government to carefully study the multiplicity of micro finance institutions in the area of operations of banks so as to avoid multiple financing, which was vitiating the SHG recovery performance.

Apart from credit needs, the farmers should also be ensured of remunerative prices for their produce, extension services and quality seeds, he said.

He appreciated the efforts of the Government through Rythu Chaitanya Yatras to create awareness among the farmers about right cropping pattern, proper usage of fertilisers and pesticides, post harvest technologies and proper utilisation of credit.

Citing the directives of the Union Finance Minister for each bank branch to lend to at least 100 new farmers, he urged the State Government to help banks identify the eligible new farmers by issuing pattadar passbooks for those not having them.

Referring to the major irrigation projects in the State, Mr Ramakrishnan urged the Government to provide banks information regarding villages being affected by such irrigation projects and route the compensation through service area banks, since banks have substantial lending in these areas.

The Chief Minister, Dr Y.S. Rajasekhara Reddy, responded positively to the request and directed the Government officials concerned to involve the banks in the compensation process.

While appreciating banks for achieving their targets under the State-level credit plan, he urged the SLBC to fix an ambitious target of around Rs 37,000 crore for the next financial year as against the target of Rs 26,142 crore fixed for the fiscal 2005-06.

More Stories on : Credit Market | Rural Development | Andhra Pradesh

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