Drought, debt waver scheme affects loan recoveries in Himachal

Shimla:The farm debt waver scheme may have translated into votes, returning the UPA government to power for another term, but it has seriously dented bankers, mainly cooperative banks here, whose recoveries have sharply fallen and the whole approach to farm credit stands affected.

Chief Secretary Asha Swarup, CMD UCO SK Goel presiding over state bankers meetAt the state level bankers meet today that was presided over by chief secretary Asha Swarup and was attended by SK Goel, CMD of UCO bank, which is the lead banker for the state, it was disclosed that between March 2009 and June 2009 loan recoveries at the cooperative banks had alarmingly fallen from 86.24% to 55.83 percent.

Recovery was considerably lower for government sponsored programs also which fell to 64.52% June 09 from 87.58% in March 09.

Later speaking to the media, Goel said that the recoveries were low because the whole state faced a drought and farm productivity and incomes fell.

As the whole state was declared drought hit, under Reserve Bank of India guidelines loans would be restructured and rescheduled, he said.

However, others differed saying that since it was mainly the cooperative banks that had taken a hit, it was the debt waver scheme which was mainly responsible for the drop in loan recoveries. One banker on conditions of anonymity said, “farmers, who mainly do their banking with cooperative banks, in the hope of another debt waver scheme were reluctant about repaying their loans.”

In her address Swarup said that the government had launched two ambitious projects for farming community that were bound to bring socio-economic transformation.

Referring to the Pandit Deen Dayal Kisan Baagwan Samridhi Yojna and Doodh Ganga Yojna, she asked the banking sector to provide credit facilities to the farmers under these projects.

Goel said that there were few takers for the crop insurance schemes introduced in the state. “Less than 10 percent fruit growers had opted for the apple and mango insurance schemes introduced on a pilot basis in the state,” he revealed.

Despite the low recoveries, farm credit off take against a target of Rs 288.60 had touched Rs 421.93 crore till June 09.

Total business of banking sector had gone up from Rs 41,240 crore to Rs 43,334 crore, registering a growth of 5.08% and deposits with banks had increased from Rs 27,773.84 crore in March 09 to Rs 29,183.89 crore in June 09.

Total advances increased to Rs 14150.69 Cr from Rs 13465.85 Cr in the same period. Towards total credit inclusion, the bank data showed that coverage of 97.03% stood achieved.

As Editor, Ravinder Makhaik leads a team of media professionals at Hill Post. Spanning a career of over two decades in mass communication, as a Documentary Filmmaker, TV journalist, Print Media journalist and with Online & Social Media, he brings with him a vast experience. He lives in Shimla.

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