PSBs may not meet agri-lending target

A A

Aftab Ahmed: Mumbai, Nov 24 2012, 03:07 IST

may take 2-3 years, even as they look for new ways on increasing its direct exposure to farmers and also look at alternative lending models. The Union finance minister P Chidambaram during a meeting with public sector lenders last week urged bank executives to give a greater thrust towards meeting their priority lending targets including agricultural loan target of 18%.

“The finance minister did mention shortfalls in the agri-lending target a cause of concern and banks have a roadmap for meeting these targets but it will not happen in one year. Union Bank will take 2-3 years before it meets the 18% target,” said SS Mundra, the executive director of Union Bank.

As per RBI guidelines, banks must invest the shortfall in the agri-lending targets to Rural Infrastructure Development Fund (RIDF) established with Nabard. “RIDF’s rate of return is very low. Banks would rather look for ways to meet their agri target then take this route. This is not a viable route,” said Ram S Sangapure, GM retail of Central Bank of India.

Apart from lending more aggressively to farmers, bankers say they are looking to meet to meet their agri-loan targets through schemes like the Kisan Credit Card scheme and have sanctioned loans to the tune of R5.2 lakh crore since the inception of the scheme in 1998-99. Other options to boost lending to agriculture include lending to Farmers’ Service Societies (FSS) and Large-sized Adivasi Multi Purpose Societies (LAMPS).

Ads by Google

Single Page Format

Previous | 1 | 2

Eavesdropper No more money for Kingfisher: SBI chairmanRBI to replace Rs 10 bank note with coins Bond yields inch up on govt borrowing, liquidity crunch fear

Previous Story Dhanlaxmi Bank not planning to fill vacant senior manager posts Next Story IPR, people movement roadblocks in Asean FTA

Reader's Comments| Post a Comment

Be the first to comment.