To bring out farmers from the clutches of money lenders, finance minister Pranab Mukherjee on Tuesday urged public sector banks (PSBs) to increase their kisan credit cards (KCC) across the country by 20% in 2010-11, both in terms of the number of accounts and the amount disbursed.

He also asked banks to tap the vast opportunity provided by the semi-urban and rural markets by converting savings in these areas into financial assets. For states, the most important job is the financial inclusion of the population, he said. ?I advise banks to transform savings from the semi-urban and rural markets into financial assets through effective financial inclusion. It will strengthen financial deepening,? Mukherjee said.

?Only 37.2% of bank branches are in rural areas and only 40% of the country?s population has bank accounts. Financial inclusion enables the poor to bring their savings in the common financial system, is an avenue to remit money to their families in the villages and also weans them away from the clutches of money lenders,? he observed. Highlighting the plus points, Mukherjee said this year the country had a record credit flow in agriculture. Against a target of Rs 3,25,000 crore for the year, the credit flow to the agriculture sector went up to Rs 3,66,000 crore.

The government has set a target to provide banking facilities to areas with population above 2,000 by March 2012,the finance minister said.

He said the northern region has 22,494 bank branches which amount to approximately 26% of the total bank branches. ?There are 19,141 habitations with population above 2,000 as per the 2001 census that do not have banking facilities in the northern zone. Such habitations shall be provided banking facilities by March 2012,? he stated.

?The productive sectors of the economy must receive timely credit so that economic production is not impeded,? he said while addressing a meeting with chief ministers of northern states and PSU bank heads. Mukherjee pulled up Punjab and Uttarakhand for not amending their respective State Cooperative Societies Act. The FM has asked the states to implement the Vaidyanathan committee’s recommendations to improve the cooperative-credit structure. The finance minister also asked the chief ministers to regularly review the progress of the centrally-sponsored schemes, so that the benefits reach the common man.

He said implementation of the Aam Admi Bima Yojana and Swavalamban or the contributory pension scheme, are priorities of the Centre. Mukherjee revealed that in the area of micro and small enterprises? credit, the total credit in the north zone states has grown by 23% during 2009-10, over the previous year. States such as Haryana, Jammu & Kashmir, Uttrakhand and Punjab have shown a growth of credit of more than 20% during the year 2009- over the previous year in credit to MSE sector. The growth in the remaining states and Chandigarh has been lower. Mukherjee also asked the states–which have received the revival package for the short-term cooperative credit structure–to take up reform measures required to be put in place to avail of the Central funds.

He further informed that in the housing sector, the total housing credit in the north zone states has grown by about 67% during 2009-10, over the previous year. Interestingly, Jammu & Kashmir has shown the highest growth in the region of over 100%. He showed concern over the decreasing CD ratio of the states, and said this was high only in Chandigarh, at 141% against a benchmark of 60%.

He added that while agriculture credit flow has grown by 36% in the region, Haryana has shown a growth of over 50%.