Institutional lenders achieve 80% of Kharif credit target in Maharashtra
Mumbai: Formal lending institutions have achieved 80% crop credit disbursement target in Maharashtra till 31 August, according to a report by State Level Bankers’ Committee (SLBC). The SLBC is a representative body of all lending institutions and Bank of Maharashtra is its convener. Till 31 August, district co-operative banks, public sector banks, and private lending institutions had disbursed Rs.30,210 crore as against the Kharif season target of Rs.37,677 crore for the 2016-17 fiscal, the SLBC report says. These loans have covered around 4.44 million farmers from among Maharashtra’s 13.7 million card-holding farmers.
For the 2016-17 Kharif and rabi season, the SLBC and Maharashtra government have set a target of Rs.51,235 crore. In May, Maharashtra chief minister Devendra Fadnavis had asked the SLBC members to extend crop credit to 80% of the state’s ‘card-holding farmers’. Fadnavis had told the banks that in 2015-16 only 5.8 million farmers or 42% of the total 13.7 million cultivators had been given formal credit forcing many farmers outside institutional credit cover to seek loans from private money lenders at high interest rates.
“By August we have reached out to about 32% of 13.7 million farmers and it is very unlikely we will cover the remaining 48% farmers or another 5.7 million card holders. Maharashtra is mainly a Kharif season region and Rabi season loan target is also lower than the Kharif target,” said a senior official from one of the public sector banks requesting anonymity. This official said the Reserve Bank of India had not accepted the Maharashtra government and SLBC’s request to approve a loan restructuring plan for nearly 3 million farmers.
“These farmers are not part of the loan restructuring plan that the state government has carried out in consultation with the Centre. They owe around Rs.36,000 crore to lending institutions and the state government had requested RBI to restructure these loans so that around 3 million farmers could be made eligible for fresh credit. This request has not been accepted by the RBI given the central bank’s stern position on banks’ non-performing assets,” said the banker.
Charudatta Arkatkar, deputy general manager of Bank of India and SLBC secretary, said the Kharif credit disbursed till 31 August represented a substantial increase of Rs.4000 crore over crop credit outgo till 31 August 2015. He said the SLBC members would meet the target and may even disburse more than the target by September end. “This month we will disburse nearly Rs.10,000 crore to sugar cane growers assuming an individual credit offtake of Rs.1 lakh by a sugar cane grower holding at least one hectare. Maharashtra has nearly one million hectares under sugar cane cultivation,” Arkatkar said.
“The public sector banks have increased their Kharif season credit disbursement by around 20% over the previous fiscal and the scheduled commercial banks have raised it by 22%. The co-operative banks have disbursed only 4% more than they did in 2015-16 Kharif season,” Arkatkar said. Of the total Kharif loan target of Rs.37,677 crore, public sector banks account for Rs.19,544 crore. Till 31 August, the public sector banks had disbursed Rs.14,520 crore or 74% of the target. The district co-operative banks have a Kharif target of Rs.13113 crore for 16-17 of which they had disbursed Rs.12232 crore or 93% till 31 August .
Asked why co-operative banks had done way better than the public sector lenders, Arkatkar said the performance of the co-operative banks looked better only in percentage terms. “If you look at it in absolute terms, the public sector banks have actually done better because they had a much higher target as compared to co-operative banks. PSBs have disbursed Rs.14,520 crore compared to Rs.12,232 crore lent by co-operative banks,” Arkatkar said.