FM to review bank credit for west zone

Finance Minister Pranab Mukherjee will meet the chief ministers of western states, including Maharashtra and Gujarat, on Saturday to review the flow of bank credit to agriculture, housing and microfinance enterprises to these states.

He would also review the work on financial inclusion, progress on centrally-sponsored schemes and performance of regional rural banks (RRBs), a senior official in the State Bank of India said. The meeting, to be held in Mumbai, will be attended by chairman and managing directors of Mumbai-based public sector banks as well as senior bank and state government officials.

In Maharashtra, all banks — commercial, cooperative and RRBs—have planned credit disbursement worth about Rs 65,000 crore for 2011-12. The credit target covers priority and non-priority areas. Banks had lent just over Rs 52,000 crore in 2010-11, according to data released by the State Level Bankers Committee (SLBC). Bank of Maharashtra is the convener bank of the state. The total allocation of funds under the priority sector lending for 2011-12 is Rs 54,618 crore, about 84 per cent of the total plan outlay for Maharashtra.

As for Gujarat, the state reported about 21 per cent growth in advances in the year ended March 2011, as against nationwide growth of 21.2 per cent. The growth is better compared to 18 per cent recorded during the previous year, SLBC data for Gujarat said.

The lending to agriculture, a key component of the priority sector, will be taken up for discussion. An SBI official said with the good monsoon till date, the demand for agriculture credit had improved across the states for kharif. The credit demand is expected to be better in the coming rabi season also.

On the credit flow for agriculture, the government has set a country-wide target of Rs 4.75 lakh crore for disbursement by all agencies in 2011-12. Banks have been advised to step up direct lending to agriculture and credit to marginal farmers.

For 2010-11, the target was Rs 3.75 lakh crore, of which 119 per cent had been achieved by March by lenders, including cooperative banks and RRBs.