Banks to disburse Rs 6 lakh cr agri loan in FY13

Public sector banks have now set a target to disburse Rs 6 lakh crore agriculture loan during the current fiscal. This is Rs 25,000 crore higher than the earlier target.

Inaugurating a new Rural Training Centre at Amaravathipuram, Karaikudi, being set up by the Indian Bank, Indian Overseas Bank and NABARD, Finance Minister P Chidambaram said that in 2011-12, agriculture loan target was Rs 4.50 lakh crore, and Rs 4.75 lakh crore was disbursed. For 2012-13, the target was set at Rs 5.75 lakh crore.

“Last week, I met the chairmen of public sector banks, and they said would disburse Rs 6 lakh crore in 2012-13 at 7 per cent rate of interest,” said Chidambaram. He added, the interest rate will come down to four per cent for farmers who pay the loan and interest on time.

He further said farmers should look at non-farming activities to boost their income, considering the fact that they can’t depend on agriculture due to uncertainty of rains.

M Narendra, chairman and managing director of Indian Overseas Bank, said the banks would be focusing on non-farming activities as well. In a move to increase the productivity of agriculture in Tamil Nadu, the public sector banks have set a target to increase their lending to the agriculture sector by almost 41 per cent to Rs 51,000 crore. The significant jump is mainly due to increase in investment credit for the farmers. Of the total disbursement, 60 per cent will go towards crop loan.

Last year, the investment credit disbursed by banks was around Rs 3,000 crore, and this year we are looking at around Rs 25,000 crore. So far, the banks were not focusing much on certain types of loans, including combined harvesting, cold storage, godowns, warehousing and others.

According to SLBC data, around 77 lakh of the 82 lakh farmers using Kisan Credit Cards, availed of banking credits. This year the banks would cover around 20 lakh, including five lakh repeat finance under KCC.