Financial Daily from THE HINDU group of publications
Thursday, Nov 11, 2004
Financial Daily from THE HINDU group of publications Thursday, Nov 11, 2004 |
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Forex Agri-Biz & Commodities - Farm credit Kalam wants banks to double credit flow to farm sector — `Find ways to invest forex reserves profitably' Our Bureau
New Delhi , Nov. 10 THE President, Dr A.P.J. Abdul Kalam, has said that banks should explore ways to profitably invest a portion of the $120-billion foreign exchange reserves. Outlining a six-point mission for the banking sector in his inaugural address at BanCon 2004 here on Wednesday, Dr Kalam said banks should make efforts to more than double the flow of credit to the agriculture sector in the next three years. "We have a growing foreign exchange reserve of about $120 billion. The bankers can have a mission: how to invest and multiply a portion of the foreign exchange reserve, if it is made available for investing in relatively higher yield enterprises," Dr Kalam said. He said efforts should be made to increase agriculture and agro-processing credit to Rs 2,00,000 crore from the existing Rs 90,000 crore within the next three years. The President also urged banks to create and nurture five rural development projects, similar to the bio-fuel project, which can be applicable for a large number of villages leading to employment generation through enterprises for at least one crore youth. He said banks must find out ways to innovatively fund sick SSI units so that latest technology can be infused to help them overcome their problems and become profitable ventures in the next three years. To participate in the improvement of healthcare, Dr Kalam urged banks to provide a concessional interest rate for the creation of corporate hospitals that can provide networked healthcare for the rural community and also attract medical tourists for cost-effective treatment through quality doctors. Dr Kalam said banks must participate in infrastructure development including the provision of 10 crore quality dwelling units with basic infrastructure in the rural areas, in association with State urban development authorities. He suggested that at least Rs 10,000 crore should be set aside by banks to provide venture capital to innovative scientists and technologists. "The days of development financial institutions (DFIs) seem to be over. The current fashion is a universal bank. Even the redoubtable IDBI has converted itself into a universal bank, shedding the robe of a pure DFI," Dr Kalam said. He said this had shifted the responsibility of providing development finance to banks. "The development finance responsibility, with its inherent risks, is squarely and fully on the banking sector," Dr Kalam said. Urging banks to extend the scope of the education loan scheme, the President said he received several complaints that banks were not disbursing loans under the scheme. "I find that there is no mechanism for funding other courses, apart from professional courses, which is also required for the holistic development of our nation. I would request the banking community assembled here to find a suitable mechanism for nurturing the economically weaker section of our youth through financial support for pursuing higher education in all disciplines," he said.
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