Farm loan to exceed target, touch Rs 5.20 lakh cr: Nabard
New Delhi: Farm loan disbursal is expected to exceed the target of Rs 4.75 lakh crore and touch Rs 5.20 lakh crore in 2011-12 on the back of good monsoon, National Bank for Agriculture and Rural Development said on Monday.
"Based on the data available for the first four months, it is expected that the farm loans will rise to Rs 5.20 lakh during the current fiscal," Nabard Chairman Prakash Bakshi said here.
The target of credit flow to agriculture sector by banks and financial institutions was pegged at Rs 4,75,000 crore in 2011-12.
Agriculture credit disbursal had increased to Rs 4,26,531 crore in the last fiscal against the target of Rs 3,75,000 crore.
On refinancing, Bakshi said Nabard has already provided Rs 38,000 crore to cooperative institutions as refinance so far. Refinance will be around Rs 50,000 crore during the current fiscal against target of Rs 40,000 crore, he added.
Since 2006-07, the government was providing interest subvention to all public sector banks, Regional Rural Banks and cooperative banks for short-term crop loans up to Rs 3 lakh, so as to ensure that short-term agriculture credit was available at 7 percent to farmers.
From 2010-11, an additional 2 percent interest subvention was provided to those farmers, who repay their short-term crop loans in time. Thus, the short-term crop credit is available to farmers at 5 percent in 2010-11.
The interest subvention scheme was further incentivise prompt repayment by farmers by providing a further incentive of 3 percent interest subvention in 2011-12.