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).