Banks achieves 88.7% of priority sector target

The banking sector in Karnataka has disbursed Rs 31,020 crore under priority sector during 2009-10 as against the projection of Rs 34,940 crore, thereby attaining 88.7 per cent of the target.

Reviewing the performance of the banks for fiscal 2010, Basant Seth, chairman and managing director, Syndicate Bank, and chairman of State Level Bankers Committee (SLBC), Karnataka, said, credit disbursal to agriculture sector was to the extent of Rs 20,368 crore during the year, a year-on-year growth of 20 per cent.

“Other states in southern India have shown better growth in the agriculture sector. This year, with good rains taking place, we expect banks to disburse much higher amounts and targets will be fixed accordingly,” he said.

Under the secondary and tertiary sectors the disbursement was of the order of Rs 3,765 crore and Rs 6,242 crore respectively.

The outstanding advances to priority sector were of the order of Rs 76,320 crore, constituting 44.42 per cent of the credit, surpassing RBI stipulation of 40 per cent.

Similarly, advances to micro, small and medium enterprises sector stood at Rs 27,224 crore as of March 2010 compared to Rs 16,920 crore in March 2009, showing a growth of 60.9 per cent.

With regard to financial inclusion, Seth informed the quarterly meeting of SLBC that all banks have submitted their board approved plan for achieving the objective of providing banking facilities to villages having a population of more than 2,000. There are 3,290 villages in the state with a population of over 2,000 which presently do not have banking facility. They will be covered by March 2012. The extensive use of IT-based solutions like smart cards, mobile banking, among others will be made use of through business correspondents/facilitators to provide banking solutions to villages.

Seth also called on banks implementing the pilot project in six districts to hasten the process. He requested sponsor banks of the regional rural banks to take appropriate steps to bring RRBs under core banking solutions at the earliest so that delay in the National Rural Employment Guarantee Act (NREGA) payments can be avoided as majority of NREGA beneficiaries and gram-panchayats maintain accounts with RRBs.

He said, the government of Karnataka has sanctioned an interest subsidy of 3 per cent for crop loans (up to Rs 50,000) to farmers through the public sector and regional rural banks. This is in addition to the subsidy provided by the government of India. However, claims under the scheme have been very low. “I request all banks to look into this aspect and submit their claims after proper verification of data. I also request banks to provide wide publicity for popularising the scheme,” Seth said.