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Banks find a rewarding crop

Rajalakshmi Menon

MUMBAI, July 6

NATIONALISED banks are waking up to the fact that lending to the farmer is a viable option.

Banks such as Bank of India, Bank of Baroda and Canara Bank have identified agricultural finance as a thrust area and are now looking to establish long-term relationships with farmers by providing them with a whole gamut of services including kisan credi t cards and composite cash credit limits.

Bank of India has identified crop loan as an important area in agricultural credit and has assigned around 1,600 of its rural and semi-urban branches to garner a minimum of 100 crop accounts each during this year. The bank has also identified 200 special ised agricultural cells to handle the entire crop finance requirements in those areas.

Additional disbursements of around Rs 2,000 crore in the current fiscal are targeted against Rs 1,200-1,300 crore for the year ended March 31, 2001.

According to bank officials, the bank is looking at a 25 per cent growth in disbursements towards agriculture every year and is looking at developing farmers as permanent clientele by providing them with all requirements.

Bank of India had achieved total agricultural advances of 16.2 per cent of the total advances against the minimum requirement of 18 per cent. Officials, however, said that with the bank's current focus on agriculture, lending in this sector would surpass 18 per cent of the advances portfolio.

``Recoveries in agriculture are very high, nearly 75 per cent, and we also have the infrastructure in place. Our personnel are experienced in this lending as it is nothing out of the ordinary. We are only giving it an added thrust this year,'' said a sen ior Bank of India official.

Canara Bank has identified 30 potential branches in each State to focus on lending in the agricultural sector. The bank plans to have fresh disbursements of Rs 2,900 crore this year against Rs 2,268 crore in the previous year. The bank also has 11 specia lised agricultural branches.

``Recoveries in agricultural lending are the highest and with 60 per cent of our branches in rural and semi-urban areas, a shift in focus towards agricultural lending is warranted,'' said an official of the bank.

Bank of Baroda, too, expects to increase disbursements from about Rs 1,427 crore to Rs 1,670 crore for the year 2001-02. The bank has around 2,400 branches out of the total of 2,600 dealing in agricultural finance and has six specialised agricultural bra nches focussing on agriculture.