Special Correspondent

It is for landless farm workers to start businesses

Krishna Grameena Bank is an SBI subsidiary

GULBARGA: The Krishna Grameena Bank, a subsidiary of the State Bank of India, has become the first Regional Rural Bank in the country to introduce an innovative scheme to provide loans to landless agricultural workers who take land on lease to start small businesses.

Chairman of the bank V.M. Hagargi and General Manager T.E. Nagappa told presspersons here that the scheme was introduced on a pilot basis at two branches — Narona in Aland taluk of Gulbarga district and Talamadagi in Basavakalyan of Bidar district — in November 2009. They termed the response to the scheme as “overwhelming”.

They said that under the scheme, called “Joint Liability Scheme”, the farmer need not produce any document pertaining to ownership of land or even the lease deed. The bank would select beneficiaries who formed groups to carry out business in the same village. Farmers in this group would be given a maximum loan amount of Rs. 50,000 each at an interest rate of seven per cent for agricultural loans and at 11 per cent for small business ventures. “We propose to provide loans to at least 100 farmers this year, and the scheme will be extended to other branches in Bidar, Gulbarga and Yadgir districts in phases,” Mr. Hagargi said.

At present, a similar scheme is in operation at the Gubbi branch in Tumkur district of the State Bank of India.

Mr. Hagargi said that by crossing the Rs. 2,000-crore mark in terms of turnover in 2009-10, the bank had been upgraded to a position where the chairman would have the powers to sanction higher loan amounts, while the staff could look forward to better growth prospects.

The bank chairman can now sanction loans of up to Rs. 2 crore.

He said the bank had achieved a turnover of Rs. 2,242 crore and deposits had increased to Rs. 1,094.80 crore by 2009-10. Mr. Hagargi said the bank had also mobilised fresh deposits totalling Rs. 123 crore through various campaigns.

It had extended advances of Rs. 1,147.14 crore last year, while its non-performing assets stood at only 1.3 per cent. The bank had also achieved a net profit of Rs. 17.88 crore in 2009-10, he added.