Srinagar: Banks in Jammu and Kashmir have achieved just 43 percent lending target amounting to Rs 9,028 crore to the agriculture sector till the end of March 2021 against the annual target of Rs 20,770 crore.
The ‘poor performance’ of banks while lending to the priority sector has not gone well with the J&K government.
“The Chief Secretary expressed his concern over poor lending to the priority sector in general and agriculture sector in particular despite immense potential in these sectors,” reads an official document.
“He asked Reserve Bank of India to review the status and reverse the trend so that credit flow is achieved as per the laid norms of maintaining 60% CD Ratio with 40% credit to priority sector which includes agriculture, MSME, export credit, education, housing, social infrastructure and renewable energy,” reads an official document.
“CS expressed concern that performance of new generation Private Sector Banks and Cooperative Banks with regard to lending under priority sector in UT of J&K has remained unsatisfactory. The loaning pattern of some private sector banks, which are aggressive in lending to non-priority sectors but are showing low appetite in lending to priority sectors of the economy, is a matter of concern.”
“Chief Secretary directed banks and financial institutions with poor performance to scale up priority sector lending so as to achieve the stipulated targets,” it adds.
As per the official document, the reason for poor performance is: “Low performing commercial Banks: PNB, ICICI Bank, HDFC Bank, EDB and JKGB having significant footprint in UT of J&K have poor achievement under agriculture sector, especially in Jammu, Baramulla, Anantnag, Pulwama and Shopian districts which have more than 50% share in total agriculture credit target of J&K.”
“Ten Cooperative Banks operating with 263 branches (with 157 Rural Branches) in J&K have disbursed Rs. 22.47 Crore during the FY 2020-21 to the agriculture sector, registering an achievement of 1.58 % viz-a-viz Annual Credit Plan target for 2020-21.”
“Low Credit flow to Allied Activities: Though J&K has a huge potential under allied activities like sheep/ goat, poultry, fisheries, dairy development, bee keeping, mushroom culture and sericulture, but the share of credit to these sectors has so far remained low at 4.6% of total disbursement under Agriculture Sector. The insurance companies are reluctant to offer comprehensive and affordable products to cover such activities and the farmers do not find it viable to pay huge premium amounts to secure their respective activities.”