New Delhi: The government on Saturday said banks are fully prepared to help farmers in mitigating the impact of drought in some areas, including re-scheduling of loans.
After reviewing performance of public sector banks, Finance Minister P Chidambaram said agriculture credit is likely to cross Rs 6 lakh crore this fiscal against the target of Rs 5.75 lakh crore.
Besides, he said, 11.5 Kisan Credit Cards (KCC), which are debit cards, will be changed into debit-cum-ATM cards for the benefit of farmers.
"We take note of the fact that parts of India are likely to be affected by drought if they have not already been affected...All bank chairmen have told me that they are fully geared to meet the requirements of farmers in drought-affected areas," he told reporters.
The short-term loans to farmers are being re-scheduled as medium-term loans and banks would be giving them new loans for replanting an alternative crop, he said.
"(Banks) will do everything necessary to ensure the farmers do not suffer much during the drought. Credit will be provided for fodder, credit will be provided for maintaining cattle," he added.
The Minister said banks have informed him that branch managers in affected areas have been "fully sensitised".
According to India Meteorological Department(IMD) data, the monsoon rains are deficient by 16 percent as on August 16.
Karnataka, Gujarat, Maharashtra and Rajasthan are among the areas that have been affected by drought.
Chidambaram said banks have provided with taluk-wise numbers for Karnataka, Andhra Pradesh, Maharashtra, Gujarat and some other parts of the country.
The Finance Minister said: "Banks have told me that they will easily cross that (Rs 5.75 lakh crore target for the fiscal), it will touch Rs 6 lakh crore. In last five years they have always exceeded the target and this year also they will exceed the target".
On converting Kisan Credit Cards into debit-cum-ATM cards, he said, "All these card are now replaced by debit-cum-ATM cards. Kisan Credit Cards will now become debit plus ATM cards. This is a revolutionary change and I think the farmers will benefit from this change."
He also said 60 percent farmers are taking the advantage of 3 percent interest subvention being given on 7 percent interest rate on farm loans. The subvention makes the effective rate of interest only 4 percent.
Chidambaram said only 40 percent of farm loans are attracting 7 percent rate.
"Seven percent interest itself is a very low and attractive rate of interest. 60 percent of farm loans are availing the subvention it is a very welcome development," the minister he added.