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| 'Andhra govt committed to protect loan repayment system' |
| BS Reporter / Chennai/ Hyderabad Jul 14, 2009, 00:35 IST |
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The Andhra Pradesh government is considering setting up a fund to help the banks improve their loan recovery rate. The banks loans will be paid from this fund to farmers and others who could not repay due to unavoidable reasons, according to chief minister YS Rajasekhara Reddy.
The government is talking with various banks about the modalities for the proposed fund, he said at the State Level Bankers’ Committee (SLBC) here on Monday.
The banks pointed out that the recovery rate had fallen to about 85 to 90 per cent in the last few months from about 97 per cent after various political parties had promised loan waivers of many kinds. Commenting on this, the chief minister said the loan waiver extended last year was only a one-time effort and the farmers should not expect a similar thing again. The government is committed to protect the repayment system from collapsing, he said.
He asked the banks to encourage the farmers to take crop insurance schemes as this would help them in reducing their non-performing assets if farmers did not repay the loans due to crop failures. He wanted the banks to increase the loans to government-sponsored housing schemes, Indira Kranthi Patham (self- help groups) in rural and urban areas, new tenant farmers, for dairy farming, sheep and goat rearing and poultry and to artisan or craftsman clusters on a priority. Citing the Sircilla weaver cluster in Karimnagar as an example, he said there were no suicides in the weaver cluster after banks extended loans to them.
The chief minister also wanted the banks to work towards a total financial inclusion, which the state ought to have achieved last year itself.
Earlier, he released the credit plan for 2009-10 in which the banks have agreed to extend Rs 55,500 crore loans, about 18 per cent more compared with Rs 47,000 crore proposed last year.
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