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RECOVERY OF LOANS FROM FARMERS HAUNTS AP BANKS


 “On review of the position as on June 2011, it was observed that the overdues are mounting under crop loans, agricultural term loans, SHG loans and loans under Government sponsored schemes,” Mr R. Ramachandran, President of the State Level Banking Committee (SLBC) and CMD of Andhra Bank, said.

Addressing the 175th SLBC meeting here on Friday, he said this issue assumed significance as the reporting of NPA will soon be “system driven”.

“Banks need the Government's urgent help to get the recoveries, which will motivate the (bank) managers to lend more under these schemes,” he pointed out.

The meeting was chaired by the Andhra Pradesh Chief Minister Mr Kiran Kumar Reddy. Recently, the SLBC conducted a special meeting on the overdues under agriculture sector, with many members expressing “serious concern” that the crop loans of 2007-08 are not being repaid by farmers with the “hope that these (loans) will be waived”.

The Chief Minister expressed unhappiness over the fact that the banks were falling short of the target in regard to Credit Guarantee Scheme for the SME sector.

It was pointed out that under this scheme, banks had extended finance to 3,015 units with an outlay of Rs 186 crore by the end of August 2011, as against the current year's target of 15,000 units.

TENANT FARMERS
On the Chief Minister's query regarding issue of Loan Eligibility Cards (LECs) to tenant farmers, Mr Ramachandran pointed out that “in the operation of the scheme, there are some teething problems as it is the first year of operation.” Against the 5.45 lakh LECs issues, banks had received applications from only 91,768 LEC holders.

The agricultural advances by the end of June 2011 were at Rs 85,932 crore, with an y-o-y increase of 18.24 per cent. On the issue of declaration of crop holiday in some parts of the State, he said this will have an adverse impact on recovery of the dues

SOURCE: http://www.thehindubusinessline.com/industry-and-economy/banking/article2400844.ece

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