The Andhra Pradesh Chief Minister, Mr N. Kiran Kumar Reddy, on Monday asked banks to step up lending to farmers during the on-going rabi season.
Addressing the 176th State Level Bankers Committee meeting here, Mr Reddy said banks need to repeat their performance in 2010-11 when their advances to agriculture exceeded the target by over 18 per cent.
However, as of September 30, 2011, banks disbursed crop loans to the tune of Rs 21,601 crore against the target of Rs 30,985 crore.
From the current rabi season onwards, the Government announced that it would bear the total interest burden of the farmers on the crop loans up to Rs 1 lakh in the event of prompt repayment.
The ‘pavala vaddi' scheme was also extended to the loans up to Rs 3 lakh from existing limit of Rs 1 lakh.
The credit to micro, small and medium enterprises was also neglected by the banks and there was a need for increasing the credit flow, the Chief Minister added.
Mr R Ramachandran, President of the bankers' committee and Chairman and Managing Director of Andhra Bank said improving agricultural credit was a priority area for banks.
In line with an ordinance from the State Government, banks issued loan eligibility cards to over 5.77 lakh tenant-farmers during the current financial year.
So far, about 1.81 lakh tenant-farmers were extended credit as against 95,000 during the last financial year, he said.
On the recovery front, there was a need for both banks and the Government to work together to give continuous publicity for prompt repayment of the loans and the financial benefits associated with it.
“We have already requested the State Government to release advertisements indicating the need for timely repayment to banks,'' he said.