The Hindu Business Line : Kerala agri co-op bank fears liquidity crunch

THE apex Kerala State Cooperative Agricultural and Rural Development Bank (KSCARDB) is fearful of a liquidity crunch thanks to delay in release of refinance by the National Bank for Agriculture and Rural Development (Nabard).

The co-operative bank has continued to lend for agriculture and non-agriculture activities in view of the policy announcement by the Centre for doubling of agriculture credit. But, contrary to established practice, Nabard has suddenly chose not to release refinance even in respect of lending made from the third quarter of the current financial year.

"The sudden and untimely stoppage of refinance will adversely affect the liquidity of the bank," Mr K. Sivadasan Nair, President, KSCARDB, told Business Line here.

When contacted, Mr T.V.N. Kurup, General Manager, Nabard Regional Office, emphasised that KSCARDB is a major client but denied any stoppage of refinance. "It's only the other day that Rs 22 crore has been released in refinance to the bank. The Nabard head office is considering the request for release of an additional Rs 150 crore."

According to Mr Nair, the bank had projected a refinance programme of Rs 300 crore for 2004-05 in conformity with the policy of adding an incremental 30 per cent to the previous year's disbursement (Rs 226 crore). The bank availed of refinance to the tune of Rs 134.76 crore as on September 30, 2004. Additional refinance is now being sought for debenture proposals and drawal applications amounting to Rs 170 crore in various stages of release and sanction.

An amount of Rs 230 crore has been remitted to Nabard during the current financial year and another Rs 22 crore is due for payment on April 1. But refinance has not been released even to the extent of remittances made, Mr Nair said. He feared that the proposed move to postpone the release to April, coupled with a likely hike in refinance in the meantime, would lead to a liquidity crunch.

Rescheduling of the refinance on the pretext that the target for the Kerala region has been fully met will not stand scrutiny in view of the Centre's directive for doubling the quantum of agricultural credit. Mr Nair requested Nabard to release, before March 31, refinance in respect of flotation proposals worth Rs 170 crore already submitted.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Rupee declines; securities dull

Elcot, HDFC join hands to promote infotech

`Inorganic growth, the way forward for IDBI'

UCBs with Rs 50 cr deposits to be on a par with commercial banks

Kerala agri co-op bank fears liquidity crunch

Migration of high net worth individuals to foreign banks