Bangalore, Jun 13 (UNI) Besides providing an impetus to the economy as a whole, the Rs 71,000 crore farm loan write off announced by the Centre would actually help the PSU banks to bring down their NPA level, Central Bank Executive Director Albert Tauro said today.
Speaking to reporters, briefing them on agricultural debt waiver by the bank, he said the farm loans extended by the banks would reimbursed from the Centre once they were written off.
This means that the banks would not suffer any NPA due to non repayment of such farm loans.
''Even this will provide a driving force to the economy as there would be more production and sale of agricultural inputs,'' he said.
The 97-year-old Central Bank, having one of the highest number of rural branches among PSU banks, would be writing off an estimated Rs 1,200 crore of farm loans, benefitting around 4.22 lakh farmers.
In Karnataka itself 10,000 farmers, who are the Central Bank customers, would benefit.
Mr Tauro said Central Bank, which achieved a business mix of Rs 1,87,607 crore in the last fiscal, was targetting to surpass the Rs 2,30,000 crore mark during the current financial year.
Various measures like higher yield on advances, reduction of high cost deposits and bringing down the administration cost, which was now at 10 per cent, would be implemented to achieve the target. It was also looking to more than double the third party business this year, he said.
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