The government is considering a proposal to exempt stamp duty on agricultural loans issued by commercial banks. Finance Minister K.M. Mani told a meeting of the State Level Bankers Committee (SLBC) here on Monday that a decision on the issue would be taken soon after assessing the financial implications.
Pointing to the substantial share of commercial banks in primary sector credit, the last meeting of the SLBC had sought stamp duty exemption on the grounds that it would result in an increased credit flow to the agriculture sector. The Finance Department, however, is worried that it will impact revenue receipts. Agriculture loans taken from cooperative banks are already exempted from stamp duty.
Addressing the meeting, Mr. Mani urged SLBC to disburse education loans at base rate. Minister for Rural Development K.C. Joseph said there was no uniformity in sanctioning education loans. He said banks were often flouting RBI directives to charge exorbitant rates of interest.
The Minister said that the maximum number of complaints received at the Chief Minister’s mass contact programme pertained to education loans. Banks were turning a blind eye to the interest subvention scheme announced by the government. “This goes against the basic principle of social security schemes,” he said.
Mr. Joseph called on commercial banks to come up with schemes for the rehabilitation of non-resident Keralites returning home due to the work restrictions imposed by Gulf countries. “A major portion of the annual overseas remittance of Rs.75,000 crore goes to these banks. Hence they should work out a rehabilitation package for these people.” Pointing out that the dairy sector in the State was facing a crisis due to the outbreak of foot-and-mouth disease, he urged banks to disburse loans to dairy farmers at the same rate as agricultural loans.
Presiding over the meeting, Chairman and Managing Director, Canara Bank, R.K. Dubey said a committee comprising representatives of RBI, NABARD and commercial banks would be constituted to address complaints in sanctioning of education loans and to work out a rehabilitation scheme for Gulf returnees.
The review meeting was informed that commercial banks in the State had disbursed Rs.34,909 crore to the priority sector during the first six months of this financial year. Of this, Rs.16,551 crore was for the agriculture sector; Rs.2,717 crore for the secondary sector; and Rs.15,641 crore for the tertiary sector.
The total deposits of the commercial banking system in Kerala as on September 2013 touched Rs.2,52,338 crore while total advances registered Rs.1,81,166 crore. The credit deposit ratio of commercial banks was 71.8 per cent. Total advances to the priority sector reached Rs.1,01,468 crore.
Additional Chief Secretary V. Somasundaram; Agriculture Secretary K.R. Jyothilal; Taxes Secretary A. Ajithkumar; General Manager, RBI, Uma Sankar; General Manager, NABARD, K.R. Rao; and Deputy Secretary, Department of Financial Services, V.K. Chopra were present.