Farm credit growth flat, say bankers

Chandigarh, May 12

The low offtake of agriculture advances in Punjab is a cause for concern, said bankers as they met here today during the State-Level Bankers’ Committee meeting.

Between March 2022 to March this year, the agriculture sector advances have grown by just 1.40 per cent.

The data released by the committee revealed that the agriculture advances made by public sector banks had shown a negative growth of 6.86 per cent. However, private sector and regional rural banks had shown a good growth of 12.25 and 10.60 per cent in extending agriculture loans. The total number of farmers availing the agriculture loans was 25.17 lakh, with total agriculture loans advanced till March this year being Rs 81,112 crore.

The data also revealed that of the total outstanding agriculture loans in Punjab were to the tune of Rs 90,003 crore. However, of this, the term loan component (taken for a defined timeframe to meet non-seasonal expenses of farmers) is Rs 23,550 crore, which is just 26.17 per cent.

The term loan should ideally be 28 per cent of the total outstanding loan. This is because infrastructure financing or capital formation was not being done in rural areas.