New Delhi: The Indian banking sector has surpassed its credit disbursement target for three financial years between 2016-17 (Apr-Mar) and 2018-19, in a row banks have surpassed, a Ministry of Finance release said. The targets are fixed by the government on an annual basis.
The government had set a target of Rs 11 lac crore for the year 2018-19 while the banks achieved a 114% disbursement amount at Rs 1,254,762 crore as reported by National Bank for Agriculture and Rural Development (NABARD).
Banks achieved over 118% and 116% during 2016-17 and 2017-18, the release said.
The loan disbursed to the small and marginal farmers was over 626,087 crore which was almost 50% of the total loan disbursed. This was Rs 45,630 crore more than the amount disbursed in 2017-18.
The government implements an interest subvention scheme for short term crop loans up to Rs 300,000 to ensure availability of agriculture credit to farmers at a reduced interest rate of 7% per annum to the farmers.
The scheme provides interest subvention of 2% per annum to banks on use of their own resources. Additionally, 3% incentive is given to the farmers for prompt repayment of the loan, thereby reducing the effective rate of interest to 4%.
The ‘Kisan Credit Card Scheme’ provides a flexible limit of Rs 10,000 to Rs 50,000 to marginal farmers based on the land holding and crops grown including post harvest warehouse storage related credit needs and other farm expenses and consumption needs. RBI has also decided to raise the limit for collateral-free agriculture loans from 100,000 to 160,000.