Priority sector lending: Share of coop, rural banks dips in Haryana

Vijay C Roy

Tribune News Service

Chandigarh, February 21

The share of cooperative and regional rural banks (RRBs) in priority sector lending has been steadily declining in Haryana while it has been increasing in case of commercial banks. According to insiders, low recovery rate and paucity of capital base are the main reasons for the decline in their share.

According to data compiled by Nabard, the share of cooperative banks in priority sector lending was reduced to 13.52% in 2015-16 from 14.71% in 2013-14 and 13.91% in 2014-15. In absolute terms, in 2015-16, its priority sector lending stood at Rs 11,333 crore. The total priority sector lending by banks was Rs 83,846 crore in 2015-16.

The story of RRBs is no different. Its share in priority sector lending also decreased from 7.74% in 2013-14 to 6.82% in 2015-16. It was 7.56% in 2014-15. The RRBs have extended advances to the tune of Rs 5,718 crore in 2015-16.

On the contrary, the share of commercial banks in priority sector lending has increased from 76.91% in 2013-14 to 79.09% in 2015-16. 

A senior official in Nabard said, “The cooperative banks are in dire need of funds. Since these are member-driven organisations, the pressure is on mobilising resources. So there is a need for resource augmentation which can be done by capital infusion by the state governments. Also, they have to increase their membership base to attract deposits and extend credit. Secondly, they have to increase their recovery percentage which is 73%.”