Banks and co-operatives have disbursed loans amounting to Rs. 1.38 lakh crore during the first six months of the current fiscal. With this these lenders have met 42 percent of the target set by the government for the entire financial year. The target to be achieved in the whole year stands at Rs. 3.25 lakh crore.
Of the total loans provided till September, commercial banks account for 92,595.08 crore, co-operatives Rs. 27,704.85 crore and regional rural banks (RRBs) Rs. 17,531.31 crore.
The centre has set targets of disbursing farm loans worth Rs. 2.5 lakh crore for the commercial banks. On the other hand, targets to be achieved by co-operatives and regional rural banks are Rs 45,000 and 30,000 respectively.
In the 2009-10 budget, the finance minister Pranab Mukherjee had announced farm loans at subsidised interest rates of six per cent for those who payed their dues on time. He had also said that the 71,000 crore debt waiver scheme announced during budget 2008-09, would be extended by six months till Dec this year due to delay in monsoon.
The current rate at which farm loans are extended is 7 percent per year.
Banks are not expecting an increase in loan defaults. LNV Rao, general manager, Union bank of India said that though a slight rise in defaults in agri loans cannot be ruled out, the non performing assets (NPAs) would remain within a manageable level and is expected to decline from the current 2.5 percent to 2.2 percent.