The central bank revised the lending target for RRBs to 60 per cent of their outstanding advances as against 40 per cent earlier. RBI also said that at least 25 per cent of the total priority sector advances (15 per cent of the total outstanding advances) should be to the weaker sections of the society.
MPs Committee In Mumbai To Assess Agri Sector Credit
Mumbai, May 22 A high-level, 50-member parliamentary committee on agriculture is in Mumbai to assess the existing system of credit flow to the agriculture sector as also to the food processing industry. The study team, led by DMKs Palani Manickkam, will be in the city till Saturday. The team members are expected to meet the Reserve Bank of India governor Bimal Jalan, chairmen of five nationalised banks and officials of National Bank for Agriculture and Rural Development.
The decision was taken with a view to providing more credit to the segments under priority sector. The Parliament Estimates Committee had reviewed RRBs operations and their levels of achievement vis-a-vis the prescribed 40 per cent target at a meeting held in August 2002 and prescribed the hike of the target. The RRBs were required to maintain 40 per cent priority sector target from the fiscal 1997-98.
During 2001-02, the credit extended by RRBs increased at a lower rate of 17.9 per cent as compared to 23 per cent in 2000-01. During the period, the credit-deposit ratio of RRBs rose to 42.5 per cent (42.1 per cent), according to RBIs latest statistics.
Loans and advances outstanding in respect of RRBs for agriculture accounted for 45.7 per cent of total advances as on March 31, 2001. The term loans for agriculture and allied activities at Rs 3,547 crore formed 49 per cent of agricultural advances, while crop loans constituted the remaining amount. Non-agricultural advances accounted for 54.3 per cent of total loans and advances as on March 31, 2001.
The asset quality of RRBs has been witnessing a significant improvement over the past few years. This has been possible due to their improved recovery performance. The improvement in asset quality is evident from the fact that, the per cent of standard assets has increased to 83.9 per cent in 2001-02 from 81.2 per cent in 2000-01.