Maha to seek RBI nod on DCC loan sanction in drought-hit areas

The Maharashtra government will seek RBI's permission to allow the financially-strong district central cooperative banks (DCCs) to disburse loans to their neighbouring districts with weaker counterparts.
Marathwada, a region reeling under severe drought, is the top priority of the state government.
Out of the eight DCC banks in this region, five are financially weak and hence their target of distributing a certain amount of farm loans would be shifted to commercial banks.
The state machinery has focused on the region by implementing various schemes, including Jal Yukta Shivar, to supply water by railway and distribution of food and fodder.
"The state government, during the review meeting of Kharif season held in last June, had given a target of distribution of crop loan worth Rs 32,244 crore.

"However, the bank could distribute only Rs 25,000 crore worth of loans to farmers through the DCCs," said Shailesh Kumar Sharma, Principal Secretary, Cooperative Department.

According to him, due to the drought since the last three years in Marathwada and other regions of the state, DCC banks have failed to recover the loans from farmers.
"It was the state's standing order not to recover loans from farmers in drought-hit areas and the banks followed it. But due to this, several banks lost their liquidity, they are not able to provide fresh loans to farmers," Sharma added.
According to the cooperative department data, Osmanabad DCC bank is in the worst financial condition as it could recover only 25 per cent of the targeted recovery of loan from farmers, followed by Aurangabad (50 per cent), Hingoli (61 per cent), Parbhani (75 per cent), Beed (79 per cent), Nanded (81 per cent) and Jalna (95 per cent).

Latur DCC bank has recovered 101 per cent out of its targeted recovery.
Nagpur, Gadchiroli, Latur, Nanded, Pune, Kolhapur, Raigad, Satara, Solapur and Washim DCC banks are in a sound financial position and hence the state is considering to allow them to provide loans to the farmers from the neighbouring district.