Ministers read out a litany of complaints to bankers assembled at Saturday’s State-Level Banker’s Committee (SLBC) that the state government subsidy credit schemes were being frustrated by the inadequate execution by the banks.
Chief minister Kiran Kumar Reddy led the charge, expressing displeasure that decisions agreed to by bankers at the SLBC meetings were not being communicated to bank branches all over the state, resulting in farmers and self-help groups being denied benefits announced for them by the government.
For instance, the chief minister said that under the state government’s interest subsidy schemes, farmers needed to repay only the principal on loans up to ` 1 lakh. But this has not been communicated to bank branches at the ground level, with the consequence that farmers’ were confused about the easy credit policies adopted by his government.
Another pet peeve of the chief minister was that banks were insisting that each farmer taking a loan of Rs 1 lakh retain `20,000 in his bank account as a kind of security deposit. For instance, if a farmer took a loan of Rs 5 lakh, he would have to pay Rs 8,300 per month for five years. But if the bankers kept a portion of the loan money as a deposit and expect the farmer to repay the entire Rs 5 lakh, it in effect amounted to charging the farmer an interest of Rs 11,600. This was creating an additional burden on the ryots. “Do not insist on keeping a part of loan as a deposit,” he directed the bankers.
Kiran Kumar Reddy also complained to the bankers that differently-abled members of self-help groups were being refused lending.
Taking the chief minister’s cue, finance minister Anam Ramanarayana Reddy added that he too was not happy with the banks because they were dragging their feet on distribution of Kisan credit cards to tenant farmers. Though there are 25 lakh tenant farmers in the state, only 5 lakh Kisan credit cards have been issued, and loans have not been sanctioned to many of the tenant farmers who hold such cards. “The Tenant Farmers Act was passed two years back, but lending to them has been slow,” he said.
Women and child welfare minister Sunitha Lakshma Reddy too observed that bankers were not implementing some of the directions given by her department. Revenue minister Raghuveera Reddy urged the bankers, “Give farm loans boldly. Otherwise, the state will face a threat to its food security.”
This was the 180th meeting of the SLBC, a periodic ritual meant to arrange an interface between the government and banks which are mandated to extend loans to the priority sectors, chiefly agriculture. Frequently, understanding reached in the SLBC meetings does not translate into action on the ground for a number of practical reasons. For instance, one of the plaints of the ministers at Saturday’s meeting was that the banks fell far short of the credit target they had agreed to at the last meeting. The target for rabi was `600 crore but the banks sanctioned only `54 crore as loans.