The Reserve Bank of India has formed a one-man committee under R Gupta to investigate the falling credit offtake in the agricultural sector from commercial banks and also to work out ways to increase it. The committee is currently surveying all regions across the country to assess the reasons behind the declining trend in agricultural credit offtake. Having recently completed its rounds in the northern and western parts, it is now conducting a survey in the eastern region.
The committee, in its bid to probe agricultural lending, is holding talks with ministers of agriculture and finance at the state level, officials of the state agricultural department and heads of all commercial banks.
Top government officials said that Gupta had also called upon agricultural workers and bank officials at the grassroot level.
Recent indications were that agricultural credit from commercial banks had been on the wane compared to state cooperative banks, land development banks or regional rural banks. The commonperception on low levels of credit from commercial banks may be attributed to low levels of recovery by the latter.
A top state government official, however, contended that agricultural credit linked to subsidised programmes resulted in a low recovery rate of 40 to 42 per cent, whereas the non-subsidy-oriented schemes had high recovery rates upto nearly 85 per cent.
The committee, apart from investigating the reasons for low offtake will, in its efforts, also find solutions to end this problem. It is looking into easier methods of extending loans by simplifying the application process, the reduction of mortgaged assets against loans, etc.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
