Govt increases agri lending target by nearly 30%
The government has increased the agricultural lending target of banks by nearly 30% to Rs 2.25 lakh crore for 2007-08. The target for 2006-07 was Rs 1.75 lakh crore.
By Atmadip Ray, TNN |
KOLKATA: The government has increased the agricultural lending target of banks by nearly 30% to Rs 2.25 lakh crore for 2007-08. The target for 2006-07 was Rs 1.75 lakh crore.
Banks have successfully expanded their short-term agricultural lending during the last few years. During 2006-07, all banks collectively lent close to Rs 1.90 lakh crore, surpassing the target of Rs 1.75 lakh crore, Union minister of state for finance PK Bansal said here on Friday.
Praising banks for having achieved the agriculture loan target, the minister said, "We are in the third phase of financial and banking reform. The reform process has helped banks achieve the target," Mr Bansal said at a seminar organised by Bharat Chamber of Commerce here.
The challenge before the government is how to maintain GDP growth amid high inflation. "It is a matter of great concern. A stage has now arrived when banks need to re-balance asset portfolios to keep the momentum on credit growth without putting extra pressure on inflation." he said.
The wholesale price index is at 6.46% in the 12 months to March 17, 2007, matching the preceding week’s level. On banks_ operational side, Mr Bansal said banks are now being encouraged to team up with post offices and NGOs to penetrate into, hitherto, under-banked areas and increase their rural operation.
ADVERTISEMENT
"Arrangement with post offices and NGOs will help banks in their drive to achieve financial inclusion. After Puducherry, Himachal Pradesh has also achieved 100% financial inclusion," the minister said. Nearly 222 banks (including regional rural banks) with their over 65,500 branches are operating across the country. By comparison, the postal department boasts of a network of 1,55,000 offices, 80% of which are in the rural areas.
On policy issues, the minister said that the government will retain 51% minimum government holding in public sector banks. “We are however in favour of the merger and acquisition route for public sector banks to achieve higher scale of business. But such initiative need to be taken by banks themselves,” Mr Bansal said.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
