The agriculture loans should be structured in a manner similar to other lines of business, said CP Swarnkar, chairman and managing director, Syndicate Bank at the FICCI-IBA global banking conference.
He said so in the context of crop loans which are season-specific and term-based according to the needs of the farmers. Besides there should be a sense of repayment and one should look at giving additional loans based on past track record.
Business activities need mainly two types of loans, fixed loans and working capital loans, similarly, agriculture loans should be structured into given core portion and a variable portion, he said.
?We need to enhance storage capacity, built up processing capacity and increase marketing capacity,? he added.
Highlighting the need for counseling in rural area especially in financial counseling, he said, government agencies and non-government organisations would play a larger role. Anup Banerji, deputy managing director and group executive, rural & agri business, State Bank of India, said that his bank has linkages with about 7.50 lakh self-help groups. SBI has disbursed about Rs 3,500 crore in loans through such tie ups and the loans account for 45% of the market share.