PSU banks to disburse Rs 6 lakh cr to agri sector this fiscal

Public sector banks have set a target to disburse Rs 6 lakh crore as agriculture loan during the current fiscal. This is Rs 25,000 crore higher than the target set for them.

After inaugurating a rural training centre at Amaravathipuram, Karaikudi, set up by Indian Bank, Indian Overseas Bank and Nabard, finance minister P Chidambaram said agriculture loan target in 2011-12 was set at Rs 4.50 lakh crore but exceed ed to Rs 4.75 lakh crore. In 2012-13, the target had been set at Rs 5.75 lakh crore.

“Last week, when I met the chairmen of the public sector banks they said they will disburse Rs 6 lakh crore in 2012-13 at 7 per cent interest,” he said. The interest rate would come down to four per cent for farmers who repay on time.

He said farmers should look at non-farming activities to boost their income, as agriculture was becoming a tough job and they could not depend on it throughout the year due to uncertain monsoon.

M Narendra, chairman and managing director, Indian Overseas Bank, said the banks would be focusing on non-farming activities.

In a move to increase the productivity of agriculture in Tamil Nadu, public sector banks had set a target to increase their lending to the sector by almost 41 per cent to Rs 51,000 crore. The significant jump is mainly due to the increase in investment credit for the farmers.

Of the total disbursement, 60 per cent would go towards crop loan. “What we want to focus is investment credit to boost agriculture. Last year, the investment credit disbursed by the banks was around Rs 3,000 crore and this year, we are looking at around Rs 25,000 crore. No mandate has been given, only instructions were given to the banks,” he said.

So far, the banks had not been focusing much on certain types of loans including combined harvesting, cold storage, godowns and warehousing.

According to the State level Bankers Committee, around 7.7 million farmers have so far availed of banking credits of the total 8.2 million, using Kisan Credit cards.