Nabard has exceeded its refinance target by Rs 37 crore, to Rs 522 crore last fiscal, said P Mohanaih, chief general manager, Nabard, West Bengal.
Nabard is likely to set a refinance target of Rs 550 crore for commercial, regional rural and co-operative banks in West Bengal for 2009-10. The surge in demand is in view of an increase in the number of eligible farmers for agricultural loans after last year’s debt waiver scheme.
In most states, Nabard had achieved an 80 per cent target disbursement in December, while in West Bengal, it had refinanced the entire target amount of Rs 485 crore by the end of 2008 calender year.
Recently, Nabard had brought down the interest rate at which it lends to regional RRBs, cooperative banks and commercial banks by 50 basis points. The interest rate for the commercial banks at present is nine per cent per annum, while for the co-operative banks and RRBs it is 8.5 per cent.
Samir Ghosh, chairman, West Bengal State Cooperative Bank, said, the interest rate for refinance was high, as cooperative sector was already burdened with mounting defaults owing to last years' debt waiver scheme.
In the 2008-09 budget, the government had set a target of Rs 2.80 lakh crore for agriculture credit. With the debt waiver scheme, almost 40 million new farmers have become eligible for fresh agricultural loans. The maximum defaults are noted in the north eastern part of the country. In case of crop loans, the defaults tend to be higher and cooperative banks are already claiming that only that the recovery rate may drop from last year’s level of around 75 per cent. A majority of the default are in the case of crop loans.