Money & Banking

Banks suffer as farmers are unable to repay loans

Our Bureau Hyderabad | Updated on March 27, 2015 Published on March 27, 2015

Nearly ₹5,780-crore worth overdue in agricultural advances have already been classified as Non-Performing Assets.

Banks in Andhra Pradesh continue to face problems as farmers are unable to repay agricultural loans, thanks to the government’s loan-waiver scheme.

“Banks in the State are now in the receiving end as many farmers/borrowers are not coming forward for renewal of loans, in spite of the 20-per cent debt redemption amount released by the government,” CVR Rajendran, President, State Level Bankers Committee (SLBC) and CMD of Andhra Bank, said.

Recovery efforts

He was speaking at the 189th SLBC meeting held here on Friday. Further, the grievances under the scheme, which was the main election mandate of the ruling Telugu Desam Party, are also on a ‘very high side’ which is further impacting the recovery efforts of the banks, he said.

As per SLBC data, total overdue in agricultural advances stood at ₹36,493 crore in over 16.22 lakh accounts. Out of this, ₹5,780 crore has already been classified as Non-Performing Assets (NPAs).

The government should advise the farmers to put their accounts in order, which is essential for receipt of the balance debt redemption amount, Rajendran said.

“The non-payment of agricultural loans has severely affected the recycling of funds and profitability of banks, apart from hampering the agricultural operations,” he added.

The non payment of loans had also spread to the Self Help Groups, which usually has good credit worthiness before the announcement of the debt-waiver scheme.

Beneficiary list

P Pulla Rao, State Minister for Agriculture, said 33.19 lakh farmers benefited from the first phase of the scheme. A second list of beneficiaries will be released soon.

Published on March 27, 2015
This article is closed for comments.
Please Email the Editor