Chief Minister N Kiran Kumar Reddy came down heavily on banks for the slow pace of rescheduling of crop loans in the State.
Addressing the State Level Bankers Committee meeting at Jubilee Hall here on Saturday, the Chief Minister said that the State Government has declared 878 mandals as drought affected, during Khariff 2011. “Banks were required to reschedule the crop loans in these affected mandals and grant fresh crop loans during Rabi. However, as against Rs 15,823 crore eligible, an amount of Rs 489 crore only or just 3.09 per cent was rescheduled by banks,” he said.
“This performance is extremely poor and I would urge SLBC to seriously ponder the reasons for this shortfall and adopt corrective measures. We must look beyond the standard excuse that the farmers have not come forward for re-schedulement and find a way to actively engage with farmers for rescheduling their loans,” the Chief Minister said.
Kiran Kumar Reddy also asked the Reserve Bank of India to consider setting up Financial Literacy and Credit Counselling Centres (FLCCCS) in all the districts in the State. He said presently, only 12 out of 23 districts have FLCCCs. He said the benefits such as ‘Zero Vaddi’ and availability of crop insurance for the fresh loans should be explained to the farmers so that they opt for re-schedulement.
“Regrettably, there appears to be only marginal improvement in lending to the farmers, who have been issued LEC. While 1,22,740 LEC holders have been financed by the end of November 2011, the loaning improved to 1,93,966 only against a total of 5,76,147 who have been issued LEC. The percentage coverage moved from 21.30 to just 33.54,” he said. The Chief Minister urged the SLBC to take necessary steps to improve performance in giving loans against LECs. “SLBC may workout suitable packages in their credit plan for the ensuing year, so that calamity affected farmers are extended such packages, in future,” he said.
The Chief Minister also asked the SBLC to take the tasks of issuing Kisan Credit Cards on campaign mode and ensure that all eligible farmers were covered under KCC. Further, he asked the banks to fill the vacuum created due to the MFIs limiting their operations in the rural areas. He said SERP had a lending target of Rs 9,084 Crore for the year 2011-12. However, only Rs 6,018 crore have been released so far.
Kiran Kumar Reddy criticised the banks for non-disbursal of loans to the urban poor quoting over-dues under VAMBAY and Rajeev Gruhalkalpa scheme. He said that the government has come forward to help in the recovery of these loans, by undertaking to subsidise the EMI beyond Rs 300 per month in rural and beyond Rs 500 in urban area. “Banks, howerver, have not availed the offer since only seven banks executed the required MoU with AP State Housing Corporation, which is the nodal agency for implementing the scheme,” he said.
The Chief Minister also requested the banks to help the handlooms sector which is in distress.
Besides Chief Secretary Pankaj Dwivedi, State Cabinet Ministers including Anam Ramnarayana Reddy (Finance) G Prasad Kumar (Handlooms and Textiles), Uttam Kumar Reddy (Housing), Kanna Laxminarayana (Agriculture) and N Raghuveera Reddy (Revenue) attended the meeting. (INN