The Hindu Business Line : TN farmers to get loans only through kisan credit cards

Commercial banks, co-operative banks and regional rural banks agreed to issue agriculture credit only through the KCC at a State-level Credit seminar organised here on Wednesday by the National Bank for Agriculture and Rural Development (Nabard).

According to bank estimates, crop loans in Tamil Nadu could touch over Rs 10,040.66 crore in 2005-06. The potential-linked credit plan estimates put the credit potential to crop loans, agriculture term loans, non-farm sector and allied activities would be about Rs 25,374 crore but the ground level credit flow is estimated at Rs 21,000 crore leaving a gap of about Rs 4,374 crore.

These cards are expected to simplify the procedures for farmers to access and to bring down the cost of credit by enabling them to draw credit as and when required rather than the conventional route of borrowing money in a single chunk during a season. This way the interest cost would be reduced for the farmers. According to Nabard officials, the cooperative banks have issued over 13.42 lakh cards and the regional rural banks 1.02 lakh cards.

Addressing the seminar, the Chief General Manager, Nabard - Regional Office (Tamil Nadu), Dr Prakash Bakshi, called for greater investments in agriculture. Over 80 per cent of the loans for agriculture were directed towards crop loans with less than 20 per cent going towards investments.

Mr Ashok Kumar Gupta, Special Secretary (Finance), Tamil Nadu, expressed concern that a major portion of the credit gap was in agri term loan and non-farm sector.

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