Punjab: Finances from NABARD for farmers' credits

Chandigarh, June 15: The Punjab Government has sought liberal finances from NABARD through State Cooperative Banks to meet the short term and long term credit requirement of all the farmers under the cooperative fold in the state.

Cooperative Minister Capt Kanwaljit Singh during a meeting here with NABARD Chairman Y S P Thorat demanded that the bank should enhance the refinance from existing 40 percent to 70 percent of the advances made by the District Central Cooperative Banks.

The Minister pointed out that the State Cooperative Banks had chalked out a plan to disburse Rs 6000 crore as short term loan to the farmers, of which 40 percent share of NABARD was pegged at Rs 2400 crore. He suggested that if NABARD increases the loan amount, the farmers of the state could be helped immensely by saving them from falling prey to the unorganized sector, that is commission agents who charge exorbitant rate of interest.

While presenting the real picture of the declining agri sector of the state, Capt Singh said that keeping in view the input costs of the farmers, their produces were yielding nothing. He said that it becomes imperative to increase the quantum of cooperative credit at cheaper rates of interest for saving the farming community to get trapped in the vicious circle of private lenders.

He also urged the NABARD Chairman to release funds for long term loans as Punjab Agricultural Development Banks had a scheme to lend Rs 660 crore in the year 2007-08.

The Cooperative Minister also pleaded for not increasing the rate of interest on refinance for short term loans as it would result in the increase of interest rate being charged from farmers. NABARD was providing refinance at the rate 2.5 percent to the State Cooperative Banks for financing Seasonal Agricultural Operations. The Cooperative Banks had fixed the rate of interest at 7 percent and in case of increase in NABARD's interest rate not only the Cooperative Banks would suffer huge losses but also the farmers would have to pay more interest.

Capt Singh pointed out that five District Central Cooperative Banks (DCCBs) of Amritsar, Patiala, Ropar, Mohali and Tarn Taran had been declared as ineligible DCCBs by NABARD due to creation of new DCCBs of Tarn Taran and Mohali from these districts. As a result no refinance was provided against the advances made by these DCCBs.

The Minister urged that NABARD should allow refinance for these DCCBs to State Cooperative Banks and raise this issue with RBI for sorting out legal technicalities.

On this occasion the NABARD Chairman assured the Cooperative Minister of providing sufficient funds as demanded and refinance facility to Housing Federations to provide low cost rural houses. He also sought a detailed project report for providing financial assistance for water harvesting.

UNI