KOCHI: At a time when the State Level Banker’s Committee (SLBC) is putting its foot down to initiate steps including attachment of property to recover loans to farmers, it has emerged that the bad loans in the agriculture sector in Kerala is as low as 2.75 per cent.
According to a note prepared by SLBC itself, the total advances to the agriculture sector by the banks in Kerala stood at Rs 80,803 crore in March 2019, up from Rs 69,344 crore in March 2018. Out of this, only 2.75 per cent, or Rs 2,222 crore, is the non-performing asset (NPA).
Among the banks, the public sector commercial banks, at 55 per cent, were the biggest lenders to the agriculture sector, followed by private sector commercial banks (29 per cent), regional rural bank/Gramin bank (14 per cent) and small finance banks (2 per cent).
Compared to agri sector, the NPAs in other sectors are much higher. For instance, the bad loans in the Micro, Small and Medium Enterprises (MSME) sector in state stands at 8.22 per cent at Rs 4,474 crore. The NPA in the MSME sector rose from Rs 2,696 crore in March 2017 to Rs 3,808 crore in March 2018, before rising to Rs 4,474 crore.
Similarly, the loans to students for education is another segment where the bad loans are much higher than the agriculture sector in Kerala. According to SLBC, the NPA in the education loan segment is worryingly high at 15 per cent. Out of the outstanding Rs 9,841 crore worth of education loans in the state, a total of Rs 1,346 crore is classified as non-performing or bad loans.
“When the government is writing off huge loans to the corporate sector, it is not proper to go after the farmers, who are mostly repaying their loans. This is not sending the right signals,” said a bank union leader.