Government for region-wise agriculture loan disbursal

Faced with a geographically skewed distribution of agriculture loans, the government has now chalked up region-wise targets for these banks, sources said.

Soon, it may not be sufficient for public sector banks to just meet farm loan targets. Faced with a geographically skewed distribution of agriculture loans, the government has now chalked up region-wise targets for these banks, sources said.

Soon, it may not be sufficient for public sector banks to just meet farm loan targets. (AP Photo/Manish Swarup)

Earlier, the finance ministry had shown its concern over uneven disbursement of credit. While banks have managed to meet yearly targets, several districts in Jammu and Kashmir, northeastern, eastern and central India have been ‘deprived’ of bank loans. The region-wise target has been drawn up based on the rainfall pattern and crops sown.

Public sector banks have been given an agriculture credit target of ₹9 lakh crore for 2016-17, up from ₹8.5 lakh crore in the previous financial year.

“Banks will not be allowed to just meet the target in terms of numbers, they need to show that the credit has been evenly distributed.. one of the issues that has been raised is that the banks focus on easy areas and meet their targets and this way the purpose is not being served.. we need banks to focus on distribution of loans,” a senior finance ministry official, who did not wish to be identified, told HT.

About 40% of farm loans go towards Kharif crops while the rest is given for Rabi crops.