RBI may incentivise banks to lend more in credit-starved regions: M K Jain

For small and marginal farmers, institutional credit at reasonable costs can act as a catalyst and convert them into vibrant commercial farmers, Jain added

With almost 30 per cent of farming households accessing credit from non-institutional sources, the Reserve Bank of India (RBI) might consider incentivising banks to lend in backward and credit-starved areas, said M K Jain, one of its deputy governors.

He had chaired an internal working group of RBI on agricultural credit. Addressing the closing session of the 6th World Congress on rural and agriculture finance, organised by Nabard, he said the central bank had initiated steps to implement the group's suggestions. The internal working group gave its report in September. It recommended a comprehensive review of the priority sector lending guidelines