Agri credit to exceed target FY08: FM

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Chidambaram

New Delhi, Jan 4: Finance Minister P Chidambaram today expressed satisfaction over the credit growth rate and declared that the agricultural credit will exceed the target in fiscal 2007-08.

''Agricultural credit by the end of March was Rs 2,03,297 crore. In the first six months of this year, it is Rs 1,20,062 crore. So, we will exceed the target fixed for this year too,'' Mr Chidambaram told reporters after a meeting with CMDs of the Public Sector Banks (PSBs) here. The Finance Minister said all PSUs banks will meet profit and lending targets in fiscal FY08.

He also indicated that Non Performing Assets (NPAs) of the PSBs were 2.6 per cent of the total lending in the first half of in the current fiscal.

Mr Chidambaram advised the banks not to bid competitively for bulk deposits in the last quarter of this fiscal and suggested that they hike lending to the consumer goods sector.

''It is a very satisfactory rate of growth. This has happened, despite the increase in Cash Reserve Ratio (CRR). Bank credit to different sectors is also growing at a satisfactory rate. For example, credit to the small and medium enterprise sector up to September has grown by 18.12 per cent,'' the Finance Minister said.

He said bank advances have grown by 22.2 per cent as of December 7 and projected that in the current fiscal these advances will grow by 24 per cent.

''All banks have reported that their credit to minorities is moving up as a proportion of total credit,'' Mr Chidambaram said.

He said some have gone up to 11 per cent of the total credit to the minorities and some have even gone up to 12 per cent.

''But all of them are moving up. There is not one bank, which said that it is not able to improve the credit to minorities,'' he said.


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