Banks fix farm credit at Rs 23,479cr

State-level bankers' committee hikes total credit outlay for farm sector by 30%

The state-level bankers' committee (SLBC) has fixed the total credit outlay for the farm sector in the state at Rs 23,479.20 crore for the year 2004-05. It is an increase of 30.9 per cent over the Rs 17,937 crore that was disbursed in the last financial year.

Announcing the credit plan for 2004-05 at the SLBC meet here today, T S Narayanasami, convenor of the SLBC and chairman and managing director of Andhra Bank, pointed out that banks in the state fell short of the disbursement target of Rs 20,000 crore that was set for 2003-04, representing a 10 per cent gap between the target set and the amount dispersed.

Narayanasami said that the banks were targeting a growth of 42 per cent in crop loan disbursements. The total credit outlay for crop loans has been increased to Rs 11,205 crore for 2004-05 as against Rs 7,907 crore lent as crop loans in the last financial year. Last year Rs 9,667 crore was allocated for crops loans.

The total priority sector advances in the state for the last financial year were Rs 36,739 crore, which constituted 61.16 per cent of the total advances as against the RBI norm of 40 per cent.

The agricultural advances in the state as on March 31, 2004 stood at Rs 16,128 crore, constituting 26.85 per cent of net bank advances as against the RBI's norm of 18 per cent.

The SLBC has urged the state agriculture department to conduct a survey in every village in the state on the number of farmers covered under the bank credit.

"The SLBC also requests the state government to look into the issue relating to tenant farmers by making suitable amendments in the tenancy laws act to enable the tenant farmers and share croppers to access the bank credit," Narayanasami said.

The credit policy expects approximately 88.66 lakh units to be financed by banks with an outlay of Rs 23,479 crore during the current financial year. These units would approximately generate 41.86 lakh employment opportunities.

The bankers' committee has decided to continue the practice of conducting farmers' meets on a large-scale to educate the farmers on dissemination of technical knowledge and inculcating the repayment culture.

The policy also proposes formation of two lakh 'Rythu Mitra Groups' (RMGs), which will serve common interests regarding technology transfer, access to market information and self supporting finance mechanism. A total of 2.03 lakh RMGs were formed in the state and 99 per cent of these have opened accounts with the banks.

The credit policy also gives greater importance to self help groups, with an outlay of Rs 1,500 crore projected under the plan, an increase of Rs 500 crore over the last year's target.

He said that the banks in the state were maintaining a high credit-deposit ratio of 71.19 per cent as against the Reserve Bank of India's norm of 62 per cent. The credit-deposit ratio in rural areas was 82.56 per cent.