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Our Bureau

Thiruvananthapuram , Sept. 13

THE National Bank for Agriculture and Rural Development (Nabard) has sanctioned a loan of Rs 144.27 crore to Kerala State Co-operative Bank Ltd (KSCB) for 2004-05.

The amount, bearing an interest rate of 5.25 per cent, is intended for financing crop loans through 12 district co-operative banks (DCBs), according to a statement from Nabard.

It says that two DCBs, Ernakulam and Palakkad, are not yet eligible for Nabard support. However, it will consider sanctioning more funds to KSCB provided it fully utilises the limit now sanctioned.

It is pointed out that KSCB was sanctioned a credit limit of Rs 106.64 crore at 5.25 per cent during 2003-04. But it was utilised only to the extent of Rs 14.93 crore.

The loan has been sanctioned against the backdrop of the decision to increase agricultural lending by all banks, including the co-operative banks, by 40 per cent during the current year and double it in three years from now. The credit limit for the current year is designed to support the DCBs to provide concessional funds to primary agricultural co-operative societies. The co-operative banks in Kerala have decided to issue crop loans of up to Rs 50,000 to farmers at 8.5 per cent interest rate.

The statement notes that the share of KSCB and the district co-operative banks in agricultural lending has been on the decline. While the commercial banks and regional rural banks together accounted for 64 per cent of the total agricultural credit in the State, the share of the co-operative sector was only 36 per cent.

It is pointed out that the two regional rural banks in Kerala have already utilised as much as 76 per cent of Nabard's credit limit of Rs 356 crore for 2004-05. They have also maintained a good recovery level.

The Government had recently constituted a high-level working group to study and suggest measures to strengthen the co-operative credit structure in the State and improve the capability for farm credit.

More Stories on : Farm credit | Co-operatives | Agricultural Institutions | Kerala

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Nabard sanctions Rs 144.27-cr loan to Kerala State Co-op Bank

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