The Finance Minister, Mr Pranab Mukherjee, on Tuesday said that banks will surpass the short term crop loan target set in the Union Budget this year.

The crop loan target for this year was set at Rs 4.75-lakh crore, against Rs 3.75-lakh crore last year.

The Finance Minister was here to meet the heads of public sector banks — United Bank of India, Allahabad Bank and UCO Bank, and State Bank of India — to discuss the state of financial inclusion in the region.

Financial inclusion

Talking about financial inclusion, Mr Mukherjee said that banks have achieved 46 per cent of their financial inclusion target in West Bengal and the eight north-eastern states and the balance will be covered by March 2012.

“Of the 10,721 un-banked villages having population of 2,000 and above identified for financial inclusion in the region under the first phase, banks have already covered 4,969 villages either by opening brick and mortar branches or through business correspondents,” he pointed out.

The latest Government guidelines mandate setting up of a brick and motor branch in villages having a population of 5,000 by September 2012.

Regional rural banks

Mr Pratip Chaudhuri, Chairman, State Bank of India, who was present at the meeting, said that about 30 per cent of such branches could be opened by the regional rural banks, as they have better connectivity via core banking services.

“While 70 per cent of the branches can be set up by commercial banks, the rest 30 per cent can be done by the regional rural banks as the cost of operations will be low and they also have better connectivity with the rural economy,” Mr Chudhuri said.