For many banks in Telangana — their rural and semi urban branches in particular — the last few weeks had been hectic handling the rush of farmers who encashed Rythu Bandhu cheques.
Though payments under the crop investment support scheme of the Telangana government have begun to slow down, it still is not break time for bankers as they expect crop loan renewals to pick pace.
Renewals had been relatively slow for the ongoing kharif season, with only ₹1,580 crore till May 31 as against ₹₹4,000 crore during the same period last year. They are unlikely to remain so with the RUSU branches and government machinery set to find more time to focus on renewals.
“In the last 30 days, we hardly had time to do [regular] banking in RUSU branches with the unique Rythu Bandhu scheme running,” says J. Swaminathan, Chief General Manager of State Bank of India’s Hyderabad Circle.
Of the total 58 lakh cheques to be issued under the Rythu Bandhu scheme, around 48 lakh had been encashed by the beneficiaries at branches of the eight select, implementing partner banks.
Apart from being the largest lender, SBI also plays a major role in implementation of such schemes in its capacity as convenor of the State Level Bankers’ Committee (SLBC) in Telangana.
SLBC convenor
From several lakh in the first few days after the May 10 launch, the number of cheques paid at the bank counters has trickled to thousands. On Friday, 22,000 cheques worth Rs.22 crore were encashed.
With cash in hand, no debt waiver announcement plans, and boosted by an enhanced credit limit, banks are expecting crop loan renewals to pick pace.
“Renewals trigger a 20% enhancement in the credit limit,” Mr. Swaminathan said, pointing out that both banks and government machinery were pre-occupied with the Rythu Bandhu scheme.
Most crop loan renewals typically happen in June and July. For rabi, December and January are the preferred months. In a bid to encourage loan renewals, the SBI has started conducting Kisan Milan melas, he added.
The farm loan component in the annual credit plan (2018-19) was expected to be 5-7% higher than that of previous fiscal, he said. In 2017-18, banks disbursed ₹32,000 crore as against a target of ₹39,000 crore.
The credit plan is to be unveiled at the SLBC meeting, in which State Finance and Agriculture ministers will participate, on June 28.
Denying reports that the State government and banks were not on the same page on the interest waiver scheme, he said:
“We keep lodging claims and they keep reimbursing,” he said. As of March 31, the outstandings due to banks totalled ₹506 crore. It includes ₹16 crore for 2015-16 and ₹90 crore for 2016-17.
