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Monday, Sep 27, 2004

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`Banks will double farm credit in 3 yrs'

Our Correspondent

Tirupathur , Sept. 26

NATIONALISED commercial banks have been directed to double credit to agriculture in three years, said the Union Finance Minister, Mr P. Chidambaram.

In an interface with farmers and members of self-help groups, organised by the Madurai circle of Indian Bank here on Sunday, Mr Chidambaram said out of 10 crore farmers in the country only around 4 crore could avail themselves of credit from the banks. Others still looked to moneylenders. Real independence can be said to have been attained only when they can avail themselves of credit from the banks.

As soon as the new Government took over, under the new farm package, banks have been directed to finance at least 100 new farmers per rural/semi-urban branch during the current year so that more farmers are brought into the bank fold.

Banks have been directed to implement three to five projects for increasing the agricultural term loan component. The aim is to increase the credit to agriculture from Rs 84,000 crore to Rs 1,60,000 crore in three years.

Mr Chidambaram said all short-term loans given to farmers affected by natural calamities and factors beyond their control would be converted into term loan repayable over five years with an initial moratorium of two years. They will be rescheduled to make the payment in easy instalments, he said.

The Finance Minister disbursed loans amounting to Rs 228.44 lakh to 303 farmers and SHGs, including 17 educational loans for Rs 28.24 lakh. He emphasised that the loan has to be repaid to enable banks to lend to more people.

The Chairman and Managing Director of the Indian Bank, Mr M.B.N. Rao, said the bank plans to disburse Rs1,800 crore during 2004-05. Till August, Rs 703.22 crore had been disbursed.

The bank has financed 93,309 new farmers, which works out to 113 farmers per branch. Currently, the `ryoth credit campaign' has been undertaken to enhance the outreach, he said.

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