45 banks' agri lending target unmet

As many as 45 banks have failed to meet the priority sector target set by the Reserve Bank of India.

The target stipulates that 18 per cent of their net credit should flow to the agriculture sector. This has been due to low demand resulting from less capital formation in the sector and low penetration of banking services in rural areas.

Both public sector and private sector banks collectively failed to meet the agricultural lending target.

The quantum of credit extended by private banks stood at 13.5 per cent in 2005-06, up from 12.1 per cent in 2004-05 but below 14.2 per cent in 2003-04.

Similarly, public sector banks' exposure to farm sector was at 15.2 per cent in 2005-06, slightly below 15.3 per cent in 2004-05.

According to data available, public sector banks lent Rs 86,865 crore and private banks lent Rs 14,134 crore to the farm sector till December 2006, compared to Rs 68,991 crore and 10,031 crore, respectively, a year ago.