In order to augment the credit flow to rural area, the Government announced a credit package on 18th June, 2004 mainly with a view to:
i) doubling of credit flow to agriculture within 3 years;
ii) financing 50 lakh new farmers during 2004-05;
iii) providing debt relief to farmers in distress and arrears and one time settlement for small and marginal farmers;
iv) extending financial assistance to provide relief from indebtedness from non-institutional sources (e.g. Private Money lenders)
The following figures of credit disbursement show positive growth in credit to agriculture sector:
(Rs. in crores)
| AGENCY | 2002-03 | 2003-04 | 2004-05 (provisional) |
| Co-operative Banks | 23636 | 26875 | 30638 |
| Regional Rural Banks | 6070 | 7581 | 11718 |
| Commercial Banks | 39774 | 52441 | 72886 |
| Other Agencies | 80 | 84 | - |
| Total | 69560 (12.1%
| 86981 (25.0%) | 115242 (32.9%) |
(Figures in Brackets indicate percentage Growth over previous year)
Attention of the Government has been drawn on performance of some bank branches regarding Swaranajayanti Gram Swarozgar Yojana (SGSY) and rate of interest. The Government has advised the CMDs of all Public Sector Banks and Chairmen of Regional Rural Banks to ensure that the targets under SGSY are fulfilled and stern action is taken against the non-performing branches. As the interest rates on loans by Banks have been deregulated, they have been charging rates of interest keeping in mind their cost of funds, risk premium, cost of intermediation etc. However, the interest rate policy of Reserve Bank of India provides that interest rate on loan upto Rs. 2 lakh by Commercial Banks should not exceed the Benchmark Prime Lending Rate.
This information was given by Shri S.S. Palanimanickam, Minister of State for Finance in reply to a question raised by S/Shri Rayapati Sambasiva Rao, Iqbal Ahmed Saradgi and Navjot Singh Sidhu in Lok Sabha today.
BSC/BY/DN-219/05