India News: Agriculture insistent on expensive bank loans

New Delhi [Prakash Ranjan]. Prime Minister Narendra Modi and Arun Jaitley not interfere with the functioning of the banks to which he promises will be fulfilled with regard to the agricultural sector? The last two days meeting in Pune on banking reform in the public sector banks confluence knowledge bluntly told the government that they should be complete freedom in agriculture-related business loans. Three lakh bank debt, particularly the right to decide on the interest rate you want. The government meets their demand, the Bank will increase interest rates on certain agricultural loans.

Was told that he delivered on behalf of the banks total loans are about 15 to 25 per cent for agriculture, but the interest rates are fixed according to the instructions of the government.According to government policy, the rate of interest on farm loans to seven per cent, but the three lakh subsidy on loans are four per cent. It affects their cost of lending. Hence, banks should be allowed to decide the loan rate.

Rajan questions raised on the farm loan waiver scheme

Similarly, banks have also said that the government's job to set goals every year, agricultural credit banks must leave. Eight hundred crore during the current financial year, the goal of agricultural loans to state-owned banks have been fixed. In the last five years, the goal of government agricultural loan growth has more than doubled. Having goals is pressure on banks to complete it. Yet the bank to achieve this every year, but now the stranded debt (NPA), the problem is growing because of the relief sought.

The government's latest figures show that in the first six months of the current financial year, banks have a total of 646 241 crore farm loan. Of this, about six per cent (5.99 per cent), ie 38 703 crore has been transformed into bad loans. Banks on behalf of the Central Government and the Government of Andhra Pradesh from the recent example of farmers loan waiver stating that the debt recovery process is interrupted.

Why Banks Miind

>> Government increases every year from agricultural credit target

On agricultural loans up to Rs 2 lakh to the government's interest

>> debt on behalf of the Centre and the states have waived the issue of

>> The problem of bad loans in the agricultural sector is also having trouble

>> problems in agriculture recover the cost of debt