Banks miss priority sector lending target for FY11

The commercial banks have disbursed Rs 38,243 crore to the priority sector in Karnataka during fiscal 2010-11, achieving 98 per cent of the target. The banks had set a target of disbursing Rs 38,952 crore for the year under the priority sector lending.

Of this, the farm sector received Rs 24,103 crore as against the target of Rs 25,970 crore, which works out to 93 per cent of the target.

The proposed plan for 2011-12 envisages targeted level of Rs 41,328 crore under the priority sector credit, Basant Seth, convener, State Level Bankers’ Committee (SLBC) said, here today.

The finance minister in his budget speech for the current fiscal had set the ground level credit target for farm sector at Rs 4,75,000 crore for the country.

Nabard has envisaged a target of Rs 26,700 crore under agriculture lending for Karnataka, he said.

The agriculture ministry has advised banks to launch a time-bound programme to cover eligible farmers under kisan credit card scheme.

It is estimated that there are about 6 million eligible farmers in Karnataka. Of this, 3 million farmers are covered and it is proposed to cover 1.5 million farmers each during 2011-12 and 2012-13. The banks have been advised to issue KCCs to all eligible farmers on a mission mode, Seth, who is also chairman and managing director of Syndicate Bank, said.

The Karnataka government has extended the 3 per cent interest subvention scheme for crop loans up to Rs 50,000 for 2011-12 also. “Though the state government has released Rs 40 crore for this purpose, claims made so far are less than Rs 20 crore. I request the bankers to submit claims under the scheme covering all eligible farmers,” he said.

The total outstanding credit of banks stood at Rs 2,55,983 crore as at March 2011 compared to Rs 2,13,983 crore as at March 2010, recording an year-on-year growth of 19.63 per cent. The credit-deposit ratio was the highest at 95 per cent in rural areas as compared to 68 per cent in semi-urban and 77 per cent in metros.

The outstanding level of priority sector credit as on March 31, 2011, was Rs 1,05,746 crore as against Rs 90,700 crore last year, showing a growth of 16.59 per cent. The percentage of priority sector advances of banks works out to 41.31 per cent, thereby surpassing the benchmark level of 40 per cent stipulated by the RBI, Seth said.