Page 37 - Banking Finance December 2019

ARTICLE

WAYS OF

BOOSTING

AGRICULTURAL

CREDIT IN

BANKS

S ources of agriculture credit can be broadly provide crop loan to farmers. Along with crop loan proper

communication to farmers about timely repayment and net
classified into institutional and non institutional
sources. Non institutional sources include
interest charge that is 4 % should be more emphatic.
moneylenders, traders and commission agents,
relatives and landlords but institutional sources 3rd step is Discouraging distress sale: In order to
include co-operatives, commercial banks including the SBI discourage distress sale of crops by farmers the benefit of
Group RBI AND NABARD. interest subvention has been made available to small and
marginally farmers having Kisan cards for a further period
The 1st step to boost credit flow to agriculture sector is of 6 months against negotiable warehouse receipts at the
targeting. This targeting practices is followed for raising the commercial rates. Also other farmers are also covered under
flow of agriculture credit. As the budget allocation increased ware house receipt loan up to 50 lakh. This is one of the
to 1.42 lakh crore in financial year 2019-20 accordingly flow good scope of financing.
of credit should increase and to be followed.
4th step is Relief for natural calamities: In order to provide
2nd step is crop loan : Arrangement has been made to relief to farmers on occurrence of natural calamities interest
subvention of 2% will continue to available to banks for the
first year on restructured loan.
About the author
In case of severe calamities fresh loan can be sanctioned as
Rajeev Kumar per RBI guide lines that is another grey area for financing.
(Chief Manager)
Union Bank of india 5th step is to finance actors along the value chain: The
Staff Training Centre, Lucknow focus is on the links between different actors along a value

BANKING FINANCE | DECEMBER | 2019 | 37