Chidambaram slams co-op banks

The weakest link in the flow of agricultural credit is the non-complying of co-operative banks, and state governments needed to ensure that ...

The weakest link in the flow of agricultural credit is the non-complying of co-operative banks, and state governments needed to ensure that they comply with the Banking Regulation Act, Finance Minister P. Chidambaram said while addressing the Agriculture Summit.

‘‘These banks are charging a rate of interest as high as 12 per cent when the re-finance is available through Nabard can reach the farmer at 8 per cent. One per cent is added at each level due to inefficient banking,’’ the FM added.

The ministry will implement the recommendations made by the Vaidyanathan taskforce, he said. ‘‘We will organise a state CMs’ conference in May to discuss the report on receiving the consent of the PM,’’ he said.

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The FM also said the government was trying to bring consensus among various sections of the polity that were opposed to contract farming, privatisation of mandis, opening of retail trade to FDI and public-private partnership in agriculture.

‘‘The Administered Price Mechanism Act must be amended and the Seeds Bill must become a law,’’ he said.