Chavan told the meeting that while a housing loan up to Rs 20 lakh was considered to be a part of priority sector lending, much of it was being utilised by the middle and upper middle classes.

“...Very little credit flows to the people below poverty line (BPL), economically weaker sections (EWS) and low income groups (LIG),” he said, “I, therefore, suggest that within this component of priority sector lending, a sub-component may be carved out, consisting of loans up to Rs 3 lakh, that can be targeted towards BPL, EWS and LIG. This will help a large number of families in rural Maharashtra to upgrade their housing stock as well as the slumdwellers in urban areas to improve their dwellings.”

Referring to recommendations of the Rakesh Mohan Committee that cooperative banks must have a licence before March 2012, he said the Maharashtra Central Cooperative Bank and 11 district central co-op banks were yet to receive licences. “Most of these banks either have negative net worth or CRAR much less than four per cent...It seems unlikely that they will be able to satisfy the conditions for securing licences before March 31, 2012,” he said. “I would, therefore, request GOI to advise RBI to reconsider the time limit prescribed for obtaining the licence by banks so that the flow of agricultural credit is not hampered in areas where these banks operate.”

He urged banks to increase their share in crop loan disbursement. He said while the HC had ruled that guarantees revoked by the bank could not be honoured by the government unless the assets of borrowers were liquidated, the NABARD had insisted that the amount of guarantee that had been defaulted be made available by the government.