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Wednesday, July 18, 2018

FIR lodged against 16 banks for failing to give crop loans

Chief Minister Devendra Fadnavis had earlier issued directives to financial institutions to enhance the agriculture loan components to drought-hit farmers.

Written by Shubhangi Khapre | Mumbai | Updated: July 18, 2015 1:12:32 am
CM Devendra Fadnavis, Devendra Fadnavis, bank loan, farmer loan, FIR bank, bank FIR, loan FIR, mumbai news, city news, local news, maharashtra news, Indian Express Banks are reluctant to extend crop loans because they fear it would turn into bad loan. (Express Photo)

The state government has lodged complaints with the police and got FIRs registered against 16 branches of district cooperative banks and commercial banks for their failure to grant loans to farmers reeling under severe drought for the third consecutive year across Maharashtra.

Chief Minister Devendra Fadnavis had earlier issued directives to financial institutions to enhance the agriculture loan components to drought-hit farmers.

Highly placed sources in the government said the total amount disbursed till date was Rs 17,317 crore, benefiting 30 lakh farmers. This is Rs 4,230 crore more compared to 2014.

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After meetings with officials of cooperative and commercial banks, besides Nabard, Fadnavis had emphasised the need to enhance credit disbursement to farmers through agriculture term loans. However, several banks reportedly refused to adhere to the target without valid reasons.

A senior secretary said, “So far, FIRs have been registered against 16 banks. Their credit disbursement is extremely poor, causing major unrest as farmers’ loan applications were turned down.”

Citing an example, he said, “Bank of Maharashtra’s Morshi branch, Osmanabad District Cooperative Bank’s Bhun and Moreshwar branches are among the 16.” Several branches of district cooperative banks spread across eight districts of Marathwada, North Maharashtra and Vidarbha facing similar charges have also been questioned.

According to sources, all these 16 banks have disbursed only 30 to 35 per cent of the stated credit disbursement target. The chief minister had made it clear a farmer eligible for loans could not be driven away by banks.To cover larger number of farmers for loans eligibility, the government had brought new policy measures centred on restructuring of loans.

The government initiated the policy of zero loans in the first year to enable farmers to avail the loan facilities. The extension of repayment in next five years was another relief. The state had given undertaking to be the guarantor for farmer loans.

Maharashtra has a widespread banking network. There are 13,844 branches of scheduled commercial banks, regional rural banks and cooperative banks in the state. Of the above, 5,831 are rural, 2,658 are semi-urban and 5,355 are urban branches. According to official figures, the aggregate deposits of commercial banks, RRBs and cooperative banks in the state stand at Rs 15,64,955 crore, while the total advances outstanding is Rs 14,85,430 crore, including a credit deposit ratio of 94.9 per cent.

However, the credit disbursement on agriculture term loans is much lower compared to loan extended to non-agriculture sector, which is almost 300 times higher.

The Nabard report submitted to the state government mentions the urgency to increase the credit disbursement to farmers. In 2014, agriculture term loans was at 54 per cent.

Sources said the banks were reluctant to extend farmer loans because they knew it would turn into bad loan. The non-recovery of loans is primary reason for their refusal to grant loans to farmers, especially in the drought-hit regions of Marathwada and Vidarbha.

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