Farming community is unable to secure agricultural short term loans this year due to bad recovery of loans disbursed last year. And, a delay in giving guarantee to National Bank for Agricultural and Rural Development (Nabard) by the State government has complicated the issue further.
The Nabard refinances loans to the farmers and agricultural societies through Andhra Pradesh State Cooperative Bank (APCOB), an umbrella organisation for the District Cooperative Central Banks (DCCBs). The problem cropped up due to ongoing bifurcation of the APCOB.
The Nabard Act, 1981does not permit refinancing of loans to any bank that functions in more than one State. As things stand now, the APCOB is functioning in Andhra Pradesh and Telangana states.
Subsequently, the Nabard has sought special permission from Reserve Bank of India (RBI) to go ahead with refinance scheme. The RBI gave clearance with a rider that respective State governments should give a guarantee letter to the Nabard on loans refinanced. Telangana government moved swiftly and submitted the guarantee letter, but Andhra Pradesh government is yet to respond, Nabard sources say.
The APCOB became a non-scheduled bank soon after bifurcation. The bank has to meet certain criterion such as recovery of loans, capital, capital to risk (Weighted) Assets Ratio (CRAR) to be eligible for scheduled bank status. Till then, respective State governments would have to give guarantee for the refinance loans, Nabard officials say.
APCOB disbursed Rs. 7,880.45 crore (including Rs. 5,859 crore in 13 districts of Andhra Pradesh) to small and marginal farmers during 2011-12 against the total loans of Rs. 8,295.21 crore. During the year 2012-13, an amount of Rs. 9,432.92 crore was disbursed to the small and marginal farmers as against total loans of Rs.10,727 crore, including Rs. 7,553 crore in Andhra Pradesh..
The Nabard has planned to provide Rs. 7,500 crore towards short term loans this year. In addition, another Rs. 1500 crore will be issued for term loans. But, it all depends on ground level disbursement and State government’ guarantee, sources say.
