Mumbai, May 21 : The State Bank of India on Wednesday went back on its decision to halt loans for purchasing farm implements, after severe criticism from political parties as well as farmers.
The bank withdrew its earlier circular that outlined suspension of financing of new tractors and farm mechanisation equipment with immediate effect.
"We regret that our circular (asking SBI branches to put tractor loans on hold)... has been misunderstood and has given rise to concern. The circular is withdrawn with immediate effect," SBI Chairman O P Bhatt said in a statement here.
On Friday, SBI had issued a circular to its branches asking them to stop disbursals of new tractor loans, citing rising bad loans in this segment.
This decision of the countrys largest agri-lender, drew protests from across the country.
SBI has the largest farm loan portfolio amongst lenders in the country and in the period between April 2004 to March 2008, SBI financed 42 lakh new farmers.
Disbursements during this period aggregated to around Rs 70,000 crore.
Bhatt also said that the bank wanted to sensitise its branches to reduce the NPAs for the bank and also to help farmers take advantage of the Rs 60,000 crore waiver programme of the government.
He also said that the bank's non-performing assets (NPAs) in the agriculture sector had risen significantly in the past year.