The Hindu Business Line : Fewer defaults on farm loans: Cherian Varghese

THE Corporation Bank CMD, Mr Cherian Varghese, was all praise for farmers during a press conference here on Friday. Terming agriculture lending a good business for bankers, Mr Varghese said that the Indian farmers' repayment ethos is much better than some of the bigger borrowers. "In fact, we have not seen a bigger borrower feeling ashamed because he is a defaulter," he said.

The bank has around 10 per cent of the total advances in the agriculture sector. In the last financial year, the total agriculture advance of the bank was Rs 1,118 crore.

However, he hoped that things would improve in the plantation sector. Farmers should not depend on a particular crop, and they should go for inter-crops to minimise the risks.

Asked about the overseas presence of the bank, Mr Varghese said, "We don't want to have overseas presence just because somebody else has. We want the consultants (Boston Consulting Group India Pvt Ltd) to advise us on what is the potential available to us in the overseas centres, the investment required, the durability of the presence, and the business model. Only after that the bank will take a decision on overseas presence."

In the power sector front, Mr Varghese said that the credit absorption is not substantial as many new projects have not come up in this sector. On the bank's investments in the asset reconstruction industry, he said, "It is too early for me to say. We have plans and still it is not finalised. It is subject to the approval of RBI. We are planning to take 11 per cent equity in an asset reconstruction company — Actis — along with a few other banks. It is subject to pure regulatory clearances." He added that the bank has also made a 2 per cent investment in the multi-commodity exchange.

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Fewer defaults on farm loans: Cherian Varghese