Page 32 - Banking Finance December 2020

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market price. This restricts earnings of the farmers and curbs freedom to stock commodities so they may dictate the
their ability to take their produce for further processing or terms and condition to small and marginal farmers.
exports. While several states have agreed to abrogate or
change the APMC Act and abolish the mandi system, it is The third bill pertains to contract farming The farmer (
still largely the market for farmers. Empowerment and protection) agreement of price
assurance and farm service bill 2020.
Over and above when there is no restriction of sale for
industrial products then why for agriculture. The statistics Under this bill Farmers can enter into contract with agri business
show that only 36% of farmers' produce gets traded in firms, processors, exporters, wholesalers and large retailers for
regulated markets.In this way the apprehensions are for the sale of future farming produce at a pre agreed price.
time being not for long. The announcement of MSP is done
by central government so no correlation seem to be finished. The percentage of small and marginal farmers constitute
86% of the farming community. They can gain via
The second bill is related to Essential Commodities aggregation. Also the market unpredictability will shift from
Amendment Bill 2020. This will remove commodities like farmers to sponsors.
cereals , pulses , oilseeds , onion and potatoes from the list
of essential commodities. Its will do away with the Besides this will enable farmers to access modern tech and
imposition of stock holding limits on such items except under get better inputs side by side it will reduce cost of marketing
circumstances like war. Besides this provision will attract and boost farmers income. More over the Farmers can
private sectors / FDI into farm sectors as it will remove fears engage in direct marketing by eliminating intermediaries
of private investors of excessive regulatory interference in for full price realization. Also there is Effective dispute
business operation. It will bring investment of farm resolution mechanism with redressal timelines.
infrastructure like cold storages and modernizing the food
supply chain. In this way it will help both farmers and Farmers in contract farming arrangements will be the
consumers by bringing price stability and To create weaker players in terms of their ability to negotiate what
competitive market environment and cut wastage of farm they need as it is apprehension. Also the sponsors may not
produce. like to deal with multitude of small and marginal farmers.
In addition to this it is said that the big private companies
Contrary to these facilities they have the doubt that the price like exporters , wholesalers, and processors will have an
limit of extra ordinary substances are so high that these can edge over disputes. Initially these things may create the
not be implemented. Also bigger companies have the suspicion but later on it will be vanished. T

Central Bank of India net profit rises 20% to Rs 161 crore
Central Bank of India reported over 20 percent rise in its net profit at Rs 161 crore for the second quarter ended
September 30. The bank had posted a net profit of Rs 134 crore in the corresponding quarter of the previous financial
year. Its total income grew nearly 2 percent to Rs 6,833.94 crore during July-September 2020, against Rs 6,703.71
crore in the year-ago period, Central Bank of India said in a regulatory filing. Operating profit improved to Rs 1,458
crore, registering a growth of 42.16 percent from Rs 1,026 crore a year ago, it said.
The lender also improved on its bad assets ratio with the gross non-performing assets (NPAs) falling to 17.36 percent
of gross advances by the end of September 2020, from 19.89 percent by the end of September 2019. Net NPAs fell to
5.60 percent, against 7.90 percent in the year-ago quarter.

In value terms, the gross NPAs fell to Rs 30,785.43 crore from Rs 33,497.22 crore, while net NPAs stood at Rs 8,683.58
crore as against Rs 11,551.91 crore. Provisions for bad loans and contingencies, however, rose to Rs 1,104.92 crore
for the reported quarter of 2020-21, from Rs 791.33 crore in the year-ago period. The bank's total business stands at
Rs 5,00,737 crore as against Rs 4,73,080 crore, it added. Provision coverage ratio also improved to 82.24 percent,
against 76.68 percent a year ago.

32 | 2020 | DECEMBER | BANKING FINANCE