MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PAW AN KUMAR BANSAL)
(a)&(b) : As per guidelines of Reserve Bank of India(RBI), there are no separate targets/
sub-targets for rural areas. The banks are required to lend 18% of Net Bank Credit(NBC)
to agriculture sector. The amount of Agriculture Advances and their share in net bank
credit of public sector banks and private sector banks for the last two years is as under: -
(Amount in Rs.crore)
Bank Group March 2004 March 2005
Public Sector Banks 86187 (15.41%) 1,12,475 (15.7%)
Private Sector Banks 17,651 (15.81%) 21,473 (12.1%)
(Figures in brackets show the amount as % of NBC)
There are various reasons for non-achievement of stipulated target of 18% to agriculture.
These, inter-alia, include low absorption capacity, low adoption of modern technology
in agriculture, lack of infrastructure and marketing support, etc.
(c) : The banks which are not able to meet the said target of 18% of NBC to agriculture,
are required to contribute to Rural Infrastructural Development Fund (RIDF) proportionately.
Further, Government announced a policy on June 18, 2004 for doubling the flow of credit to
agriculture in three years. The loans upto Rs.50000/- to the agriculture sector were also
made collateral free, banks were advised to recruit specialized officers including agriculture
graduates and scheme of financing of agri-clinics was initiated. The disbursement by
commercial banks (public, and private sector) to agriculture has registered substantial
increase in the last two years as shown below:
(Rs.crore) 2003-04 2004-05 2005-06 (Till Dec.2005)
Disbursement 52441 81481 79,022
% Growth over 31.8% 55.38% 41.40%
previous year
This percentage growth is on the comparable figure of December 2004.
(d) : In order to examine the recommendations of Joint Committee on revitalisation support
to cooperative credit structure (Jagdish Capoor Committee), a joint committee of the
Cooperative Ministers of eight select states under the chairmanship of the then Union
Minister of State for Finance, Shri Balasaheb Vikhe Patil. was set up which suggested a
scheme for revitalisation of cooperative credit structure. Subsequently, a Task Force under
the chairmanship of Prof. A Vaidyanathan was constituted in August 2004. Based on its
recommendations and consultation with State Governments, a revival package for short term
cooperative credit structure has been approved.
