Nabard to refinance DCCBs in Maharashtra for farm loan

The National Bank for Agriculture and Rural Development (Nabard) has agreed to refinance 33 district central cooperative banks (DCCBs) in Maharashtra to offer agricultural crop loan during 2011-12, without seeking guarantee from the state government. Instead, the state-run lender would provide refinance against unencumbered securities of these banks to offer loans to farmers.

A Nabard official confirmed this move.

The arrangement is being worked out at a time when the state government has superseded a 44-member board of directors of the Maharashtra State Cooperative Bank (MSC Bank) on May 7. The decision was taken at a recent meeting of a state-level committee of bankers, comprising the state government, the Reserve Bank of India, Nabard and various commercial banks, in order to avoid any delays in the disbursement of kharif and rabi crop loans.

"The state-level bankers' committee has fixed the agriculture crop loan of Rs 23,180.66 crore for 2011-12, against Rs 13,150.88 crore for 2010-11. The objective is to make available timely loan to farmers. Besides, the decision has been taken to increase the exposure of commercial banks from the present level of 30-50 per cent. The cooperative banks continue to play a major role in the disbursement of agriculture crop loan of 70 per cent in the state. As the board of directors of MSC Bank has been superseded, Nabard will give refinance directly to the DCCBs who will later provide loan to farmers," A state cooperation department official, who did not want to be identified, told Business Standard.

The official informed that the commercial banks would also increase their exposure with the help of 20,000 primary agriculture cooperative societies in the state. These societies would work as business correspondent. The government has assured to lend necessary help to commercial banks as they have only 2,190 branches across the state.

The official said the government had already asked all district guardian ministers to ensure that DCCBs disburse timely loan to the farmers from their respective districts.