Devendra Fadnavis moots penalty on lenders failing to meet crop-loan target

Maharashtra Chief Minister Devendra Fadnavis has mooted an idea to impose penalty on banks for failing to meet lending targets of farm loans, especially crop loans, in the state that is reeling from agriculture distress.

He rubbished claims by banks that they could not meet crop-loan targets due to draught conditions. “There are widespread complaints from farmers about problems in getting money (loans),” Fadnavis said while addressing State Level Bankers’ Com­mittee (SLBC), Maharashtra.

The crop-loan target for FY19 was Rs 58,324 crore for Maharashtra, but actual disbursements were at Rs 31,231 crore. So the lenders met 54 per cent of crop-loan target in FY19. The disbursement was, however, 23 per cent higher than that in FY18. At present, there is no legal arrangement for levying fine on lenders for failing to meet loan targets. SLBC Maha­rashtra’s convener bank, Bank of Maharashtra, will be writing to bank chiefs on the thrust on meeting FY20 lending targets. “There has to be accountability for performance (targets) in banks with respect to the farm sector. The state government is paying banks amounts that have been waived off. Decisions taken at top levels do not seem to be percolating to people working at bank branch levels,” Fadnavis said.