Plans afoot to increase agri-credit flow by 30%

The apex bank said in its annual statement, “To ascertain whether the customer is satisfied with credit delivery in rural banks, a survey could be conducted with the help of an outside agency.” Considering the significance of post-harvest operations, the central bank plans to increase the limit on farm loans, routed via the produce marketing scheme from Rs 5 lakh to Rs 10 lakh under priority sector lending.

Moumita Sensarma, ABN Amro Bank’s vice-president, head, microfinance, said, “We have been awaiting this announcement since the Union Budget. This marks the marriage of the muscle power of banks with the distribution strength of MFIs and may actually repeat the revolution that occurred in the telecom sector.” She also mentioned that the concept has immense potential and the fine print of these guidelines needs to be checked out.

With regard to the small-scale industries, the Credit Information Bureau of India Ltd (Cibil) is trying to evolve a solution that would provide comprehensive credit reports on SSIs. In this context, the RBI is reviewing all its existing guidelines on financing the SSI sector, debt restructuring, nursing of sick units, etc in order to rationalise, consolidate and liberalise them.

Subir Mehra, head — commercial banking, HSBC, said, “We strongly support RBI’s move to consider making sub-targets fungible within the overall target. It is an excellent initiative and even if fungibility is not possible, it is worthwhile to broaden the definition of an SSI by weaving it around its turnover and profitability.”

In the microfinance segment, going on the lines of the Union Budget, the RBI is working out the modalities to permit banks to adopt the agency model by using the infrastructure of civil society organisations, rural kiosks and village knowledge centres to provide credit support to rural and farm sectors.