Mumbai: Maharashtra Chief Minister Devendra Fadnavis today urged banks to come up with innovative solutions to bring the farmers, who have gone out of the
institutional credit system after defaulting, back into the formal credit system.

He said there are many farmers who have gone out of banking system after being unable to service their loans from banks. "We have often seen that a number of farmers have gone out of the institutional credit system, especially in the years when drought has occurred. I feel that there is a need to think about some innovative solutions to bring them back into the formal credit system," Fadnavis said while addressing Maharashtra state credit seminar here.

He said, in the last two years, his government has tried to bring a few of these farmers back into the institutional credit system through rescheduling repayments, although the number is very small.

"There is a huge mismatch in the number of people, who have gone out and the number of farmers we could bring in," Fadnavis said. The Chief Minister said that last year his government came out with a five-year repayment reschedule plan for farmers, instead of the present three years, under which in the first year, the state pays the interest and for the subsequent years, it pays six per cent of interest.

"I think that is not a very sustainable model. We need to come out with a model, where we realise the need to bring farmers back into the formal credit system and share the haircut as well," Fadnavis added.

He suggested creating a sub-committee that can look into a sustainable model to bring back farmers again into the system. He said the state wants a sustained agricultural growth of 10 per cent.

"Irrigation is the mother of all agricultural investments, but it is very important to focus on investing in water conservation as well," a statement issued by the Chief Minister's Office (CMO) quoted Fadnavis as saying.

"Maharashtra is working speedily for micro-irrigation as there is huge demand from farmers," he added. "Value addition is a must. Food parks are the need of
the hour for assured markets. Let's work to create a Maharashtra's model," he was quoted as saying.

The credit seminar was conducted by Nabard to discuss bank credit projections for fiscal 2018 for Maharashtra. The seminar highlighted the initiatives taken by
Nabard, RBI, the Centre and the state to develop agriculture and villages.

Nabard has prepared a 'potential linked credit plan' for all the districts of the state, which contains details of the credit need for potential development in different sectors of the rural economy.

The plan for 2017-18 projects a credit flow of Rs 3.36 trillion under the priority sector lending which is 13.6 per cent increase over the previous year. The meeting was attended by senior officials from the state administration, RBI, Nabard and Bank of Maharashtra, which heads the state level bankers' committee.