Credit disbursement to priority sectors has registered a growth of 1.5 per cent during the first half of the current fiscal (April 1, 2014, to September 30, 2014) vis-a-vis the corresponding period last financial year as per the just now compiled data.
The data indicates that banks in the district collectively disbursed loans to the tune of Rs. 1,851 crore to the priority sectors, comprising agriculture, SMEs and other priority sectors like education loans, housing loans etc, during the first half of this fiscal.
During the same period in 2013-14 fiscal, credit flow to priority sectors stood at Rs. 1,809 crore.
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Segment-wise, loan disbursement to agriculture and allied sectors during the first six months of this fiscal was Rs. 584 crore against Rs. 564 crore for the same period in 2013-14. Likewise, credit to SME sector and other priority sectors this year was Rs. 1,078 crore and Rs. 189 crore, against the achievements of Rs. 1,063 crore and Rs 182 crore, during the first half of last fiscal.
Banking sector experts and economists termed the growth ‘tepid’ and feel that it could have been more considering the revival in demand for working capital in the predominant SME (small and medium scale enterprises) sector in the district and also for agricultural activities during the current financial year.
“Unless Reserve Bank of India eases the Repo rates, which correspondingly reduces the interests on loans, an aggressive credit growth cannot be registered. Perpetually, RBI has been citing inflation as cause for not reducing the repo rate.
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“But now the inflation has eased and RBI should reduce the repo rate instead of stating further excuses,” opined S. Dhananjayan, a chartered accountant and industry consultant.
Raja Shanmugam, chairman of Confederation of Indian Industry (Tirupur district council), said that apart from the high cost of funds, many banks were also showing hesitancy to lend fearing themselves whether the loan portfolio would turn into non-performing assets.