Bankers need to prevent farm loans from turning into bad debts

Mindless penetration of green revolution measures in rain-fed areas without risk mitigation efforts is resulting in loans becoming non-performing assets.

Mindless penetration of green revolution measures in rain-fed areas without risk mitigation efforts is resulting in loans becoming non-performing assets. This is also the major reason for the large number of farmers committing suicide. The government and the RBI define priority sector but actually agri-business managers are the ones who should decide, principal secretary,co-operation,Sudhir Kumar Goel said on Friday.

Goel was speaking at the national symposium on new facets of priority sector lending at the Vaikunth Mehta National Institute of Co-operative Management.

Experts from the banking sector and financial institutes said borrowers from major priority sectors,such as small and marginal farmers and those from micro,small and medium enterprises,need to be trained to make the most of loans.

Reserve Bank of India general manager,RN Dash,said,Risk is there in all kinds of loans but in the agricultural sector the nature of the risk is different. Bankers need to understand this and act accordingly in order to prevent loans from turning into bad debts.

IDBI Bank general manager Niranjan Mathure said,Grape growers in Sangli are compelled to sell their total stock at whatever prices they get as grapes are a perishable commodity. However,those who have access to technology can process them into raisin and are able to recover costs. We need to increase access to such technology.

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