Banks reworking their agriculture lending thrust

The centre's emphasis on farm lending has banks reworking their strategy for lending to the agriculture sector.

Banks are planning to start training institutes for farmers/unemployed youths, recruit agri graduates as specialist officers, and involve the state in the lending/recovery processes.

To meet the target of 30 per cent growth in agri credit, Dena Bank has identified 100 branches in rural and semi-urban centers of Gujarat and Maharashtra as thrust branches. It has almost 80 per cent branches in rural and semi-urban areas.

"Pending recruitment of 100 agriculture college graduates, we have identified officers whose services can be gainfully utilised in 100 rural and semi-urban branches," AK Khandelwal, CMD, Dena Bank, said after inking a bancassurance alliance with the Oriental Insurance Company Ltd.

The bank's agriculture credit forms 18.5 per cent of its net bank credit (NBC) of Rs 9,500 crore. Total priority sector lending is 44.5 per cent of the NBC.

Dena Bank plans to set up two rural development and training institutions in Kutch and Mehsana in Gujarat to train farmers and rural unemployed youth. These institutions will train the rural youth in agriculture allied activities.

Union Bank of India, in association with National Bank of Agriculture and Rural Development (Nabard), is also in the process of setting up colleges for the farming community where farmers will be taught other trades to safegaurd their livelihood.

Union Bank of India will set up such colleges in Idukki in Kerala and Varanasi. These colleges will impart entrepeneurial skills and train the rural youths for an alternative source of income as agricultural activity is a seasonal one.

Having created an enterprising agricultural community, the bank will extend a line of credit to reduce default rates in priority sector lending, said a banker.