NABARD Chairman concerned over decline in share of cooperatives in rural credit

Written by Charanjit Ahuja | Chandigarh | Updated: Feb 21 2014, 22:35pm hrs
Chairman of the National Bank for Agriculture and Rural Development, Dr. Harsh Kumar Bhanwala is concerned over decline in the share of cooperatives in rural credit witnessed during the last few years.

Interacting with media persons after his meeting with Punjab and Haryana Chief Ministers, Dr. Bhanwala said here today that a three pronged strategy was needed to check this trend. The strategy should be to leverage technology, to improve cooperative governance and to ensure adequate capital ratio. He said that it was really a matter of concern that the share of cooperatives in rural credit has come down and cooperatives faced severe problems of management and governance.

About his meeting with Punjab Chief Minister, Parkash Singh Badal and his Haryana counterpart, Bhupinder Singh Hooda, NABARD chief said that response of both the chief ministers and state governments was extremely positive. He disclosed that Punjab CM demanded liberal assistance under NABARD Infra Structure Development Assistance (NIDA), especially for the upgradation of all its milk plants across the state to enhance the milk handling capacity and processing facilities and to maximize the profit of dairy farmers supplying milk to these milk plants through cooperative milk unions.

When asked about the biggest challenge that he had as Chairman of NABARD, Dr. Bhanwala said that collection of farmers and aggregation of small land holdings was the biggest challenge for him. When asked about non-performing assets, he said that NPA of NABARD was almost extinct as it was a little over Rs 30 crore for a bank of the size and dimension of NABARD.

Asked to compare Punjab and Haryana on NPA parameter, he said that NABARD had no issues as far as Punjab was concerned. However, he suggested that Haryana still needs to improve recovery particularly in agri cooperative banks. He said that Punjabs insisted on PPP model of development and Badal himself was keen on financing of micro infrastructure. Punjab also demanded additional cost acceleration in the ongoing projects as a relaxation to the state government being a "special case" as the state had suffered the brunt of partition and militancy. Badal apprised Bhanwala that at present 50 projects with financial outlay of Rs 6,000 crore were under active implementation. He said during the current fiscal against Rs 495 crore, the state government has drawn Rs 269 crore to ensure timely execution of development projects. During his visit, two Directors of the Board of NABARD, J.K. Batish, and M.L. Sharma were also present.

Chairman also informed that NABARD has provided credit support under Short Term and Medium Term to the extent of Rs. 55000 crore in the State of Punjab and Rs. 45000 crore in Haryana since inception. Under RIDF, as assistance of Rs.6360 crore has been sanctioned to the State Govt. in Punjab and Rs. 4272 crore in Haryana till now. He disclosed that for storage and warehousing, a fund of Rs. 5000 crore has been created in NABARD, as against which, Rs. 2200 crore has already been sanctioned and is expected to reach Rs. 3500 crore by March 2014.