(a) whether the expert committee on rural credit has opined that the commercial banks
shunning away from lending to the farm sector despite their network of 19,000 rural branches;
(b) if so, the details thereof;
(c) whether the Government propose to make it obligatory for foreign and private
sector banks to provide credit to the priority sector as per norms of RBI; and
(d) if so, the steps taken in this regard?
THE MINISTER OF STATE IN THE MINISTRY OF FINANCE AND COMPANY AFFAIRS
(SHRI ANANDRAOVITHOBA ADSUL):
(a) and (b) Reserve Bank of India (RBI) has reported that the Expert Committee on Rural
Credit has in its report looked into the various issues relating the rural credit provided
by commercial banks. The Committee has, inter-alia, observed that commercial banks which
were made to expand their rural operations substantially after nationalization, seem to
have turned shy, as in such operations they find themselves servicing vast number of small
accounts—both deposit andborrowing-costly and cumbersome.
(c) and (d) RBI has fixed targets for lending to priority sector by private sector banks
and foreign banks. The details of the target so fixed and achievements there under
are given below:
Statement
| Private Sector Banks | Foreign Banks | |
| Priority Sector | 40% of net | 32% of net bank |
| Lending: Target | banks credit | credit |
| Lending to | 40.9% of net | 34.2% of net bank |
| agriculture: | bank | credit |
| Achievement |