A recent study by bankers has revealed the need to substantially increase the level of rural lending over the next few years.
Commercial, co-operative and regional rural banks have to step up their credit flow to the rural sector four times the current levels over the next four years to meet the investment and production credit projected by the Planning Commission.
Commercial banks, which had disbursed Rs 18,708 crore during 1998-99, are required to disburse Rs 63,677 crore during 1999-2000, a two-and-a-half time increase over the level achieved during 1998-99.
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In case of co-operative banks, the quantum of credit will have to go up from Rs 16,987 crore in 1998-99 to Rs 60,967 crore in 1999-2000, a 259 per cent increase. The regional rural banks require to step up credit disbursements by 260 per cent, the study pointed out.
The likely increase in the credit flow for 2007-08 over the actual disbursement of credit by the respective agencies in 1998-99 has been estimated to be more than four times the current level.