As the first half of fiscal 2014-15 drew to a close today, bankers in Andhra Pradesh expressed serious concern over the marked slowdown in resource mobilisation and credit expansion due to "non-recycling of funds" owing to poor repayment by borrowers.
The issue figured prominently at a meeting of State- Level Bankers' Committee (SLBC) here. The bankers were concerned over "marked slowdown in resource mobilisation and credit expansion" in the State.
"Farmers continue to demonstrate their reluctance to repay/renew crop loans and other agricultural term loans owing to debt waiver announced by the (State) government. This reluctance is being observed even in case of high value loan accounts and term loan borrowers.
"Banks are unable to recycle funds owing to slippage of agricultural loans into non-performing assets, which are on a high side," Andhra Bank Executive Director S K Kalra said.
This, apart from badly affecting the morale of field- level bank staff, was resulting in higher provisioning and ultimately affecting the credit rating of banks, Kalra noted.
Sharing the concern, State Finance Minister Yanamala Ramakrishnudu said it was a "testing time" for everyone - the banks, the Government, farmers and other sections of society."
"The Government came out with a policy of implementing the debt-relief scheme for the farmers and women self-help groups. It's a known fact the State's financial condition is precarious. Hence, banks should co-operate with the Government in fulfilling the loan waiver commitment," he pleaded.
The (waiver) process was getting delayed as the Government was undertaking a foolproof exercise to ensure all "deserving farmers" derived the benefit, Yanamala added.
According to the agenda note circulated at the meeting, the delay in loan waiver process showed a telling effect on disbursal of loans during this kharif season.
As against the target of Rs 25,888 crore for the season (monsoon months), only Rs 5,593 crore was disbursed as crop loans in the 13 districts of AP.
Farm term loan disbursement stood at Rs 1,188 crore vs the target of Rs 3,178 crore. Agriculture allied sectors got just Rs 482 crore against the target of Rs 3,843 crore.
"The first quarter ended on a dull note. Performance of banks against the targets, particularly under agriculture sector, is the lowest ever," the Minister said.
"As per the latest data, disbursal of kharif loans is just about 38 per cent of the target since the farmers could not repay the existing dues to get the loans renewed.
