The Hindu Business Line : Govt committed to closing gap in agri credit: PM

FARM CREDIT THRUST: (From right) The Prime Minister, Dr Manmohan Singh, the Karnataka Chief Minister, Mr H.D. Kumaraswamy, the Minister of State for Finance, Mr Pawan Kumar Bansal, the Union Finance Minister, Mr P. Chidambaram, and the Chairman and Managing Director, Canara Bank, Mr M.B.N. Rao, at the Centenary Celebration function of Canara Bank in Bangalore on Friday. - G.R.N. Somashekar

Bangalore , June 23

The Government's priority is to make small and marginal farmers bankable, according to the Prime Minister, Dr Manmohan Singh.

Speaking at the centenary celebrations of Canara Bank, he said: "In spite of a doubling of agricultural credit in the last three years, there are still vast uncovered gaps.

"High interest rates and a serious debt overhang still affect millions of farmers in the country. This cannot be allowed to persist."

He said that microfinance institutions have been highly successful in furthering financial inclusion and should be strengthened.

For this purpose, he called on the Finance Minister, Mr P. Chidambaram, to constitute a group with representatives from the RBI, Nabard, and major commercial banks, to formulate policies that would promote financial inclusion by stimulating financial services for the poor that would include microfinance, micro-insurance, and new delivery channels.

The Prime Minister said although the RBI guidelines on foreign investment in banks are till 2009, domestic public sector would have to rise to meet the challenges of competition.

According to him, the consolidation of public sector banks should be seriously examined to give them both depth and reach.

The banks should also devise effective global strategies for improving their international presence.

Earlier, Mr P. Chidambaram said that having large international banks was in national interest.

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