Public sector banks (PSBs) have a target to disburse agricultural loans to the tune of Rs600,000 crore (Rs6,000 billion) during the current fiscal – Rs.25,000 crore higher than what was set earlier – said India’s Finance Minister P.Chidambaram on Saturday.
Inaugurating a new Rural Training Centre (RTC) jointly set up by Indian Bank, Indian Overseas Bank (IOB) and National Bank for Agriculture and Rural Development (NABARD) here, Chidambaram said: “In 2011-12, the agriculture loan target was Rs450,000 crore but the achievement was Rs475,000 crore. In 2012-13, the target was Rs.575,000 crore.”
Karaikudi in Tamil Nadu is around 420 km from state capital Chennai. Referring to the meeting he had with the chairmen of public sector banks, Chidambaram said the bankers told him that the agricultural loan disbursement will be Rs600,000 crore this fiscal. He said the interest rate on farm loan would come down to four per cent to farmers who pay their dues on time.
Chidambaram urged the farmers to look at non-farming activities to increase their income levels as they cannot depend on agriculture for their earnings throughout the year owing to uncertain rains. IOB chairman and managing director M. Narendra said the government banks have decided to increase their lending to agriculture sector in Tamil Nadu by around 41 per cent to Rs51,000 crore. According to Narendra, of the total disbursements, nearly 60 per cent will go for crop loans while the banks would also focus on investment credit.
He said public sector banks would disburse over Rs2,000 crore in Chidambaram’s own Sivaganga constituency. Narendra said Sivaganga has 184 bank branches.
Last fiscal, banks disbursed Rs.1,284 crore loan as against a target of around Rs.1,125 crore and for the current fiscal the target is around Rs.2,065 crore. As part of its focus on taking banking services to villages, Indian Bank will set up 1,525 ultra small branches in rural areas across the country, a top official has said.
“We will be opening 1,525 Ultra Small Branches comprising one clerk, one laptop and one Rural Development officer,” Indian Bank Chairman and Managing Director T M Bashin said.
This would be in addition to the 1,965 branches the bank has all over the country, he told reporters here on the sidelines of a branch opening ceremony by P Chidambaram last evening.
Rejecting the theory that rural branches were non-viable, he said they played a key role in freeing small farmers from the clutches of money lenders and bringing the rural population under financial inclusion.
When asked whether there was any specific motive for opening branches in rural area like Sivaganga district, Bashin said Indian Bank wanted to focus on villages.