Subbarao to review crop loan disbursement in Maharashtra

Reserve Bank of India (RBI) Governor D Subbarao has convened a meeting tomorrow with a bankers’ committee in Maharashtra to review the disbursement of crop loans by commercial banks, regional rural banks (RRBs) and cooperative banks in the state.

For the first time, commercial banks have agreed to increase their share to 45 per cent from 30 per cent in disbursing the loan, while cooperative banks would reduce their share to 49 per cent from 70 per cent.

A state government official, who will attend the meeting, told Business Standard on the condition of anonymity, “At a meeting on June 8 attended by Chief Minister Prithviraj Chavan and RBI Deputy Governor K C Chakrabarty, the state-level banking committee had finalised a comprehensive plan for the disbursement of Rs 23,181 crore crop loan for the 2011-12 kharif season as compared to Rs 13,151 crore in 2010-11. It was also decided that the exposure of commercial banks would be increased from the current financial year reducing the share of cooperative banks in the state. Till the last financial year, the commercial banks disbursed a mere 30 per cent against 70 per cent at the all-India level, and therefore it was decided they would disburse 45 per cent of the total Rs 23,181 crore and six per cent by the RRBs.”

The official said so far the cooperative banks had achieved 91 per cent of the disbursement target, despite constraints after the board of Maharashtra State Cooperative Bank was superseded. The commercial banks had achieved 43 per cent of the target, he added.

“We are receiving reports from all districts where farmers are queuing up at the commercial banks for kharif crop loan. This is really a remarkable change,” the official noted.

State Cooperation Minister Harshvardhan Patil said the state government was of the view that the share of commercial banks needed to grow further, especially when the government had proposed an annual disbursement of crop loan to the tune of Rs 40,000 crore from 2016.