Farm loan to exceed target: Nabard

Farm loan to exceed target: Nabard

New Delhi: Farm loan disbursal is expected to exceed the target of 4.75 lakh crore and touch 5.20 lakh crore in 2011-12 on the back of good monsoon, National Bank for Agriculture and Rural Development (Nabard) said on Monday.

“Based on the data available for the first four months, it is expected that the farm loans will rise to 5.20 lakh during the current fiscal," Nabard chairman Prakash Bakshi said here.

The target of credit flow to agriculture sector by banks and financial institutions was pegged at 4,75,000 crore in 2011-12. Agriculture credit disbursal had increased to 4,26,531 crore in the last fiscal against the target of 3,75,000 crore.

On refinancing, Bakshi said Nabard has already provided 38,000 crore to cooperative institutions as refinance so far. Refinance will be around 50,000 crore during the current fiscal against target of 40,000 crore, he added.

Since 2006-07, the government was providing interest subvention to all public sector banks, regional rural banks and cooperative banks for short-term crop loans up to 3 lakh, so as to ensure that short-term agriculture credit was available at 7% to farmers.

From 2010-11, an additional 2% interest subvention was provided to those farmers, who repay their short-term crop loans in time. Thus, the short-term crop credit is available to farmers at 5% in 2010-11.

The interest subvention scheme was further incentivize prompt repayment by farmers by providing a further incentive of 3% interest subvention in 2011-12.