Farm loan to exceed target, touch Rs 5.20 lakh crore: Nabard

Farm loan to exceed target, touch Rs 5.20 lakh crore: Nabard

"Based on the data available for the first four months, it is expected that the farm loans will rise to Rs 5.20 lakh during the current fiscal," Nabard Chairman Prakash Bakshi said here.

The target of credit flow to agriculture sector by banks and financial institutions was pegged at Rs 4,75,000 crore in 2011-12.

Agriculture credit disbursal had increased to Rs 4,26,531 crore in the last fiscal against the target of Rs 3,75,000 crore.

On refinancing, Bakshi said Nabard has already provided Rs 38,000 crore to cooperative institutions as refinance so far. Refinance will be around Rs 50,000 crore during the current fiscal against target of Rs 40,000 crore, he added.

Since 2006-07, the government was providing interest subvention to all public sector banks, Regional Rural Banks and cooperative banks for short-term crop loans up to Rs 3 lakh, so as to ensure that short-term agriculture credit was available at 7 per cent to farmers.

From 2010-11, an additional 2 per cent interest subvention was provided to those farmers, who repay their short-term crop loans in time. Thus, the short-term crop credit is available to farmers at 5 per cent in 2010-11.

The interest subvention scheme was further incentivise prompt repayment by farmers by providing a further incentive of 3 per cent interest subvention in 2011-12.