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Tuesday, July 17, 2018

Maharashtra looks at Rs 58,662 crore crop loan disbursal for 2017-18, 11 DCCBs may find it tough

Officers of the cooperative department said 11 out of the 34 DCCBs will find it difficult to meet their targets

Written by Partha Sarathi Biswas | Mumbai | Published: April 8, 2017 1:18:10 am
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The crop loan outlay for the year 2017-18 is expected to be around Rs 58,662 crore, an increase of around Rs 7,000 crore from last year’s outlay of Rs 51,235 crore. However, 11 district central cooperative banks (DCCBs) would find it difficult to meet their targets in view of their economic condition.

Kishore Tiwari, chairman of the committee to alleviate farm poverty, said the increase in crop loan outlay was taken in view of a possible increase in crop area this year. “District Central Cooperative Banks have given given a target of Rs 20,000 crore. In case the DCCBs are not able to meet their target, the public sector banks (PSBs) will be asked to step in,” he said. Chief Minister Devendra Fadnavis is expected to chair the annual crop outlay meeting towards the last week of April.

Officers of the cooperative department said 11 out of the 34 DCCBs will find it difficult to meet their targets. Marathwada and Vidarbha have four banks each while three banks are in north Maharashtra. Recovery of these banks have been slow and they have faced liquidity problems. It was feared some banks would not be able to meet the 9 per cent capital to risk weighted asset ratio (CRAR) necessary to retain their banking licence.

Having low targets for disbursal, DCCBs actually cater to more number of farmers, with majority of their account-holders being small and medium farmers.

Vijay Ghonse Patil, managing director of Osmanabad DCCB, said that according to the initial calculations, the bank will have to disburse Rs 225 crore as crop loans. “We have received Rs 160 crore from the Maharashtra State Cooperative (MSC) Bank and are trying to raise the remaining amount from other sources,” he said. Thanks to the special measures taken to recover bad debts, the DCCB has been able to meet its CRAR and thus saved its licence.

Post demonetisation, the DCCBs have faced serious problems with liquidity as the Reserve Bank of India put several restrictions on them. Not only were the banks disbarred from accepting or exchanging old currency notes, but also the old notes in their accounts were not remitted. These banks have around Rs 3,000 crore in old notes with them.

Tiwari said the state government should take into account the problems faced by the DCCBs and take adequate steps.

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