ICICI Bank Taps State Govts To Fund Farm Sector Projects

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Mumbai, September 18: : ICICI Bank is in talks with several state governments to finance new agricultural projects and has recently signed a memorandum of understanding (MoU) with the state government of Punjab towards the same, senior general manager, PH Ravikumar, said in Mumbai on Wednesday. Likewise, the bank has been in talks with state governments of Himachal Pradesh, Uttaranchal and Chhattisgarh.

This is seen as part of ICICI Bank’s broad gameplan to meet the regulatory target of 13.5 per cent direct agricultural lending of its net bank credit. As on end-March 2002, bank’s direct lending was at 9.5 per cent, well short of the regulatory target.

Mr Ravikumar pointed out that although the merged bank had achieved the target of 18 per cent agricultural lending norm, almost half of it was by way of indirect lending. As per the the Reserve Bank of India (RBI) guidelines, out of 18 per cent total agri-lending, 13.5 per cent should be by way of direct lending and 4.5 per cent can be via indirect lending. Pertinent to note here is that RBI has urged all banks, particularly the private-sector banks, to meet the targets by end-March 2003.

Under the MoU, ICICI Bank would identify and finance new agro-projects in Punjab.

The bank has also made suggestion on the state’s agricultural strategy and recommended reduction of wheat and paddy cultivation in phases.

The MoU was signed on June 26, and would be in effect for three years.

ICICI Bank has also held informal discussions with the government of Maharashtra on the latter’s agricultural cultivation practices. The bank has suggested change in cropping pattern and introduction cultivation of maize, barlie among others.

In another initiative, ICICI Bank, along with Canara Bank and United India Assurance Company, has recently brought 5,000 farmers at Coimbatore (Tamil Nadu) under a common umbrella to provide them all the banking facilities including insurance cover.

The Reserve Bank has recently urged all domestic commercial banks to achieve their agricultural lending targets by the end of this fiscal. There is also constant pressure from the Centre and various parliamentary committees on banks’ meeting the minimum target in agri-lending.