Union Bank to double agri credit in next 3 yrs

Union Bank of India, in an effort to increase agriculture lending targets, will double the flow of credit to the sector in the next three years.

Union Bank has identified 30 potential regions in Andhra Pradesh to increase agricultural credit and the regions identified include Hyderabad.

Union Bank has 121 branches in the state having a total business of Rs 3,432 crore. Out of the total advances of Rs 1,744 crore, priority sector advances constitutes 51 per cent at Rs 888 crore. The agriculture credit constitutes 25 per cent of the net bank credit (NBC) at Rs 432 crore.

According to V Leeladhar, chairman and managing director of Union Bank of India, the bank has plans to introduce several schemes for agriculture sector in addition to those planned in association with the Indian Banks' Association (IBA).

"The bank while keeping with the national policy of increasing credit flow to agriculture and rural development has taken major initiatives to double the flow of credit to agriculture in the next three years," he said.

Leeladhar, who was touring Karimnagar district on the eve of the 'agriculture disbursement fortnight programme' of the bank, said that apart from liberalising the margin and security norms, the bank has also advised its rural and semi-urban branches to add 100 new farmers on an average during the year and finance at least 10 agri-clinics in each district.

In Karimnagar district, the bank has 11 branches of which 10 are in rural and semi-urban centres. The agricultural credit of these branches was Rs 34 crore, around 46 per cent of the total credit with a market share of around 10 per cent.

The total amount disbursed by the bank in the district till August 13, 2004, was Rs 15 crore spread over 6,200 accounts. "Of the total number of accounts, there are 1,200 new farmer accounts to which Rs 2.85 crore was disbursed during the same period," he said.

"The Union Green Card scheme has also been modified to make it more farmer-friendly. The bank has so far issued 5.86 lakh cards with a credit limit of Rs 1,436 crore," he said.

Union Bank, he said, plans to increase the number of agricultural accounts by at least 20 per cent during the current financial year.

The bank has so far formed 33,846 self-help groups (SHGs) and linked 15,370 SHGs with a credit limit of Rs 74.19 crore as on June 30, 2004.

It has also signed memorandam of understanding (MoUs) with five tractor manufacturers to provide concessional lending for farmers.