`Banks must shift to rural-centric mode for faster economic growth'
New Delhi, May 30
The President, Mr A.P.J. Abdul Kalam, has urged the State Bank of India to increase the loan allocation to the agricultural sector so that it can achieve over four per cent growth rate.
In his address at the bank's bicentennial celebrations, Mr Kalam said that SBI should look at increasing the agriculture and agro-processing credit to 20 per cent of the total loans disbursed, within the next three years.
He added that a study of the composition of SBI's loan book indicated that the loan for agriculture was static at 10 per cent. Stating that over four per cent agricultural growth was vital to increasing the overall GDP growth to 10 per cent, Mr
Kalam said that a farm management-based approach that would provide newer technologies to the farming community may have to be adopted to raise agricultural growth.
"When I study the sectoral growth rate of our economy, I find that both manufacturing and services are showing robust growth whereas the agriculture is substantially lagging behind," the President said, after releasing the commemorative coins marking the bicentennial celebrations.
The President also said that there would have to be more investments in agro-food processing so that the farmer gets the benefit for higher yield from farm through value addition to produce.
Mr Kalam called upon banks to become proactive venture capitalists that can take risks and facilitate development of innovative products suiting to rural needs through creative entrepreneurs. "This shift in emphasis is essential for enabling faster growth."
As part of the seven missions for the consideration of SBI for immediate implementation, Mr Kalam suggested that the bank should adopt and innovatively fund at least one lakh sick SSI units so that latest technology could be infused and they could overcome existing problems and become profitable ventures within three years.
Mr Kalam also said that SBI must allocate Rs 5,000 crore to SBI Capital Ventures for funding innovative scientists and technologists who could provide quality ideas for faster societal transformation including development of ICT-based knowledge products, software development, and provision of software services.
As part of social responsibility, SBI was urged to introduce a villager-friendly banking system that would free the villagers from cycles of loans.
He also called upon SBI to create and nurture five rural development projects similar to biofuel and seaweed projects that could be applicable for large number of villages, leading to employment generation through enterprises for at least five million rural youth.
Speaking on the occasion, the Finance Minister, Mr P. Chidambaram, said that SBI must prepare itself for competition, both from other banks in the country and from the expected entry of foreign banks. He expressed confidence that his dream of SBI becoming a global bank would be realised in 10-20 years.