PSBs may not meet agri-lending target
RBI has said lending to the agri-segment should constitute 18% of the total loan book of a bank, but most PSBs are short of their targets. RBI has set targets for direct and indirect agriculture credit components at 13.5% and 4.5%, respectively. Direct finance includes short, medium and long-term loans given for agriculture and allied activities directly to individual farmers, self-help groups or joint liability groups of individual farmers. Indirect finance includes lending to corporates, partnership firms and institutions for taking up agriculture or allied activities.
By September end, SBIís disbursement was 12% of its total advances. The corresponding number for Bank of Baroda stood at 15.43% and 9.86% for Union Bank of India. Allahabad Bank and Central Bank of Indiaís total agri-loan book size was 11% and 12%, respectively, of their total advances by the end of September.
Among all PSBs, only Punjab National Bank and Andhra Bank with 17.87% and 17.02%, respectively, are on track to achieve RBIís target by the end of the FY2013.
ďIn last 3-4 years, demand for corporate credit has been very high and that probably has brought down the percentage of agri-loan book in PSBs,Ē said Rajan Dhawan, executive director of Bank of Baroda.
SBIís top executives have said meeting the agriculture loan target would be challenging and
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