According to banking experts, the farm loan waiver could be the reason for low credit figures.
Mumbai: The poor off-take credit, especially for short-term crop loans, in Maharashtra has fallen by 35 per cent in public sector banks and 14 per cent in commercial banks as opposed to last year.
According to banking experts, the farm loan waiver could be the reason for low credit figures. The drop registered last year has been attributed to drought and other reasons. The latest data submitted to the state-level bankers’ committee (SLB-C) at the end of March reveals that the crop loan target for the state was Rs 54,221 crore in the 2017-2018 financial year but both public as well as commercial banks have shown a negative year on year growth in crop loan disbursement over last year. “After the government announced the wai-ver last year, fewer farmers opted for fresh credit. The drop could be because of the waiver,” SLBC officials said in the meeting.
This year, state banks were able to achieve 47 per cent of their annual target while the achievement for the same period last year was 82 per cent. Commercial banks tou-ched 65 per cent as opposed to 79 per cent in previous years. The year on year negative growth for public, commercial and regional rural banks was – 40 per cent. This was 4 per cent last year and 19 per cent the year before that. Intending to cover up the credit target, bank officers assured the state government that farmers can now avail of fresh loans.
Even at the Centre, with the Lok Sabha polls set for 2019, Union finance minister Arun Jaitley has urged banks to achieve the target of Rs 11 lakh crore in 2018-19 for agriculture lending. In the annual address to the Board of National Bank for Agriculture and Rural Development (NABARD) in February this year, Mr Jaitley said that the agriculture credit flow target of Rs 11 lakh crore for the financial year 2018-19 is achievable by the banking sector and would add to the momentum towards doubling the farmers’ income by 2022.