The just ended 2012-13 fiscal witnessed sluggishness in credit disbursement towards priority sectors in Tirupur district as the figures compiled by the Lead Bank for the period indicate a shortfall of 23 per cent, vis-à-vis, the annual credit plan targets.
District Consultative Committee for Banking Development sources told The Hindu that credit totalling Rs. 4,713 crore had been disbursed towards priority sectors covering agriculture, SME (small and medium enterprises) segment and services against the plan outlay of Rs. 6,104 crore estimated for the 2012-13 financial year.
Sector-wise, lending towards agriculture and allied activities stood at Rs 1,353 crore falling short of the target of Rs. 1,803 crore by 25 per cent. Credit flow in the SME sector too saw a shortfall of 25 per cent with Rs. 2,742 crore given away against the target of Rs 3,661 crore. The loan disbursement to the services sector was the highest among the priority sectors with the achievement standing at 97 per cent. Out of the targeted lending of Rs 640 crore to the sector, the banks in total had disbursed Rs 618 crore in the last financial year.
Lead Bank sources said drought and issues faced by the predominant SME sector were the main reasons that led to the shortfall in the lending vis-à-vis targets. Technocrats like S. Dhananjayan, a member of Institute of Chartered Accountants of India, were of the opinion that unless the interest rates were reduced, the credit off-take in industrial segment could not be improved.
“Reluctance of commercial banks to bring down the high interest rates on loans, despite the two neck-to-neck cuts in short-term bank rates by Reserve Bank of India, has dampened the spirits of SME sector to go for fresh loans for capacity expansion,” Mr. Dhananjayan pointed out. Long hours of power cut too contributed to the dip in the off-take of loans, industrialists added.