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Repair rural household economy to sustain growth: Arundhati Bhattacharya

Agri sector need an added thrust to drive the economy as it has been hit by 2 bad monsoons

Press Trust of India  |  Mumbai 

Arundhati Bhattacharya
Arundhati Bhattacharya

Calling for focussing on farm sector growth to sustain higher overall growth, the of on Friday said revival in credit demand will stay low until the balance sheets of the rural households are repaired.

are facing two challenges-growth capital and asset quality concerns. The asset quality concerns are due to lack of demand and loans given during the boom years and we don't see both improving in the medium term. Therefore, the need for focusing on farm sector growth," chairman told a event.



On overall credit growth, which averaged at a multi- decadal low of 5 percent so far, the chief said she does not see a revival in the near-term.

Agriculture sector would need added thrust to drive the economy as it has been badly hit by two successive bad monsoons, she noted.

The tepid demand in rural segment is reflected in low growth of SBI's agriculture loan book. It grew by just 3.27 per cent to Rs 1,25,068 crore in the 12 months to December 2016. The incidence of bad loans was also on higher side with gross non-performing assets at 5.93 per cent as of December 2016, she added.

Referring to the impact of demonetisation on farming sector, the chief said those segments like vegetable growers, who could not store produce and had to sell at cheap rates, were hit badly. Similarly, luxury sector has also been hit badly. But the cotton and cane farmers could manage the situation by bartering.

She also said during 50-day period of note ban, the opened as many as 89 lakh of Jan Dhan accounts, taking the overall number of such accounts to over 11 crore now, which together have over Rs 16,000 crore in deposits now. On average every such account has deposit of four digits, she said.

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Repair rural household economy to sustain growth: Arundhati Bhattacharya

Agri sector need an added thrust to drive the economy as it has been hit by 2 bad monsoons

Agri sector need an added thrust to drive the economy as it has been hit by 2 bad monsoons Calling for focussing on farm sector growth to sustain higher overall growth, the of on Friday said revival in credit demand will stay low until the balance sheets of the rural households are repaired.

are facing two challenges-growth capital and asset quality concerns. The asset quality concerns are due to lack of demand and loans given during the boom years and we don't see both improving in the medium term. Therefore, the need for focusing on farm sector growth," chairman told a event.

On overall credit growth, which averaged at a multi- decadal low of 5 percent so far, the chief said she does not see a revival in the near-term.

Agriculture sector would need added thrust to drive the economy as it has been badly hit by two successive bad monsoons, she noted.

The tepid demand in rural segment is reflected in low growth of SBI's agriculture loan book. It grew by just 3.27 per cent to Rs 1,25,068 crore in the 12 months to December 2016. The incidence of bad loans was also on higher side with gross non-performing assets at 5.93 per cent as of December 2016, she added.

Referring to the impact of demonetisation on farming sector, the chief said those segments like vegetable growers, who could not store produce and had to sell at cheap rates, were hit badly. Similarly, luxury sector has also been hit badly. But the cotton and cane farmers could manage the situation by bartering.

She also said during 50-day period of note ban, the opened as many as 89 lakh of Jan Dhan accounts, taking the overall number of such accounts to over 11 crore now, which together have over Rs 16,000 crore in deposits now. On average every such account has deposit of four digits, she said.
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Business Standard
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Repair rural household economy to sustain growth: Arundhati Bhattacharya

Agri sector need an added thrust to drive the economy as it has been hit by 2 bad monsoons

Calling for focussing on farm sector growth to sustain higher overall growth, the of on Friday said revival in credit demand will stay low until the balance sheets of the rural households are repaired.

are facing two challenges-growth capital and asset quality concerns. The asset quality concerns are due to lack of demand and loans given during the boom years and we don't see both improving in the medium term. Therefore, the need for focusing on farm sector growth," chairman told a event.

On overall credit growth, which averaged at a multi- decadal low of 5 percent so far, the chief said she does not see a revival in the near-term.

Agriculture sector would need added thrust to drive the economy as it has been badly hit by two successive bad monsoons, she noted.

The tepid demand in rural segment is reflected in low growth of SBI's agriculture loan book. It grew by just 3.27 per cent to Rs 1,25,068 crore in the 12 months to December 2016. The incidence of bad loans was also on higher side with gross non-performing assets at 5.93 per cent as of December 2016, she added.

Referring to the impact of demonetisation on farming sector, the chief said those segments like vegetable growers, who could not store produce and had to sell at cheap rates, were hit badly. Similarly, luxury sector has also been hit badly. But the cotton and cane farmers could manage the situation by bartering.

She also said during 50-day period of note ban, the opened as many as 89 lakh of Jan Dhan accounts, taking the overall number of such accounts to over 11 crore now, which together have over Rs 16,000 crore in deposits now. On average every such account has deposit of four digits, she said.

image
Business Standard
177 22