The excellent recovery track record of SHGs was now “totally distraught” and NPAs and over dues under farm sector had been mounting due to reluctance of farmers to repay/renew loans in view of the ‘Debt Redemption Scheme’ announced by the government, Andhra Bank Chairman and president of State Level Bankers Committee C.V.R. Rajendran said at the 189th SLBC meet here on Friday.
He said the reluctance of farmers to repay/renew loans had severely affected recycling of funds and profitability of banks, apart from hampering agricultural operations in the State. “With the annual closing of accounts just a couple of days away, the issue has to be addressed on priority and it is essential to advise farmers to repay the earlier loans and avail the eligible credit,” he said.
Mr. Rajendran said huge NPAs had been added under the SHGs sector. Though the government had announced relief to the SHGs by way of capital infusion of up to Rs. One lakh per group, the modalities were yet to be finalised. “This has totally vitiated the repayment culture of the SHGs resulting in NPAs mounting under this sector,” he added. He urged the government to advise farmers that the accounts had to be in order and a performing asset for receipt of the balance debt redemption scheme.
As against the annual disbursement target of Rs.77,894 crore for 2014-15 under priority sector, credit flow at the end of third quarter of the financial year had been to the tune of Rs.35,474 crore with an achievement of 45.54 per cent as against 75.89 per cent during corresponding period last year.
Agriculture Minister P. Pulla Rao said in spite of the financial crunch, the State government had implemented debt redemption scheme. He said Rs. 7,000 crore was released towards the scheme and urged banks to extend fresh loans to farmers into whose accounts the money was deposited.
Reluctance of farmers to repay/renew loans has severely affected recycling of funds and profitability of banks, says SLBC president
