New Delhi: New-generation lender Yes Bank plans to disburse Rs1,800 crore towards agricultural credit by the end of 2008-09 fiscal compared to Rs1,200 crore previous fiscal.
“Agri-lending is more challenging for an upcoming bank like us. So far, the bank has extended farm credit worth Rs1,300 crore to farmers. Total farm lending will touch Rs 1,800 crore by March-end,” Yes Bank, Group President (Corporate Finance & Development Banking), Somak Ghosh told PTI.
“We have managed agri-loan portfolio successfully with zero defaults this year,” he said.
As per the guidelines of the Reserve Bank of India, every commercial bank had to disburse 8% of the total credit for agriculture. Yes Bank had exceeded the target, Ghosh said.
He further said that credit lending to entities involved in agri-business had been higher because both offtake and payment was guaranteed. It is also easy to enter into back-to- back arrangements with the farmers, so that the loan repayments could be deducted from farmers dues.
Yes Bank lends directly to farmers and organisations working in organic coffee, tea and pesticide-free fruits and vegetables. “The bank, however, does not finance projects in genetically modified (GM) crops like corn and brinjal,” Ghosh added.