| The group is expected to submit its report by the end of May 2005. In addition to this the government is also contemplating granting autonomy to Nabard. |
| The central bank's efforts to step up credit to the farm sector gains importance as the finance minister in his Union Budget had proposed to increase the flow of credit to agriculture by 30 per cent during the year 2005-06. |
| Considering the importance of post-harvest operations, the central bank has also proposed to increase the limit on loans to farmers through the produce marketing scheme to Rs 10 lakh from Rs 5 lakh under priority sector lending. Assessment of credit disbursement to the rural areas will be done with the help of outside agencies, said the RBI. |
| As a follow-up of the budget proposals, the regulator is also working on modalities for allowing banks to adopt the agency model by using the infrastructure of civil society organisations, rural kiosks and village knowledge centres for providing credit support to rural and farm sectors and appointment of micro-finance institutions (MFIs) as banking correspondents. |
| Recently the RBI permitted MFI's to borrow. |
| Other recommendations on the target for direct and indirect lending for agriculture under priority sector lending, negotiable warehousing receipt system, setting up of agri-risk fund, computerisation of land records, permitting access to external commercial borrowing (ECB) and granting autonomy to Nabard, are under examination of the Government. |
| The RBI had recently permitted NGOs engaged in micro-finance activities to access ECBs up to $5 million during a financial year for permitted end-use, under automatic route, as an additional channel of resource mobilisation. |
| The regulator is also considering the setting up of agri-risk fund, introduction of negotiable warehousing receipt system and computerisation of land records. |
| According to figures released by RBI, public sector banks have issued around 167.9 lakh Kisan Credit Card (KCC) with limits amounting to about Rs 46,000 crore as at end-December 2004. |
| Cumulative sanctions and disbursements under various tranches of Rural Investment Development Fund amounted to about Rs 42,000 crore and Rs 24,000 crore, respectively, by February 2005. |
| Credit flow to the rural sector through bank SHG (self-help groups) linkages model also registered a rise. As at March 2005, over 14 lakh SHGs were linked to banks and total flow of credit to these SHGs was over Rs 6,300 crore, said the RBI. |
| Nabard and banks have set a target of linking additional 5.85 lakh SHGs to banks by end-March 2007. |
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