Lok Sabha Question No. 3316 (UNSTARRED), answered on 2017-08-04
Subject: Land Development Banks
Ministry: FINANCE
Asked by: RAJU ALIAS DEVAPPA ANNA SHETTI

## Government of India Ministry of Finance Department of Financial Services LOK SABHA

Unstarred Question No. 3316 To be answered on Friday, August 4, 2017/Shravana 13, 1939 (Saka)

## Land Development Banks

3316. SHRI RAJU SHETTY

Will the Minister of FINANCE be pleased to state:

- (a) whether the land development banks in the country are on the verge of closure due to their poor financial conditions and if so, the details thereof, State/UT-wise;
- (b) whether the Government has received proposal from States for their revival;
- (c) if so, the details thereof, State/UT wise including Maharashtra along with the action taken by the Government on such proposal; and
- (d) the other steps taken/being taken by the Government for revival and strengthening of the said bank?

## Answer

The Minister of State in the Ministry of Finance (Shri Santosh Kumar Gangwar)

(a)  to  (d):    The  financial  condition  of  State  Cooperative  Agriculture  And  Rural  Development  Banks (SCARDBs),  as  reported  by  NABARD,  based  on  the  56 th   Annual  Report  2015-16  of  National Cooperative Agriculture and Rural Development Federation is as under:

| SN   | Particulars              | 2014-15   | 2015-16   |
|------|--------------------------|-----------|-----------|
| 1    | No. of SCARDBs           |           |           |
|      | I Fully Functional*      | 13        | 13        |
|      | II Others**              | 4         | 4         |
|      | III No Business ***      | 3         | 3         |
| 2    | No. SCARDBs in profit    | 9         | 10        |
| 3    | No. of SCARDBs in losses | 4         | 3         |

| *   | I Fully Functional   | Haryana, Himachal Pradesh, J&K, Punjab, Rajasthan, Tripura, West Bengal, Uttar Pradesh, Gujarat, Karnataka, Kerala, Tamil Nadu & Puducherry   |
|-----|----------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|
| **  | II. Others           |  Manipur - Defunct                                                                                                                           |
| *** | III. No Business     | Assam, Bihar, Odisha                                                                                                                          |

The Government had constituted a Task Force in January, 2005 to suggest an implementable action plan  for  reviving  the  Long-Term  Cooperative  Credit  Structure  (LTCCS)  in  the  country,  which submitted its report in August, 2006. Subsequent to the implementation of Agriculture Debt Waiver and Debt Relief Scheme, 2008, the Government decided to have a re-look at the viability and relevance of a separate package for LTCCS and constituted a Task Force, in September, 2009, which submitted its report to the Government in February, 2010.

References were received from State Governments of Maharashtra and Rajasthan for revival of LTCCS. While the Government of Maharashtra had sought some relaxation in the proposed LTCCS Package, the Government of Rajasthan had requested for implementation of the Revival Package for LTCCS in the State.

In  April,  2013,  it  was  decided  not  to  implement  the  LTCCS  package,  primarily  due  to  uncertain stakeholder ownership and lack of adequate budgetary provision for the purpose.

In order to infuse liquidity into SCARDBs, NABARD provides refinance to eligible SCARDBs.  Statewise refinance disbursed to SCARDBs during the last three years, as reported by NABARD, is attached at Annexure I.

The Long Term Rural Credit Fund (LTRCF) was set up in 2014-15 with NABARD out of the shortfall in Priority  Sector  lending  target  of  scheduled  commercial  banks,  to  provide  refinance  to  Cooperative Banks  and  Regional  Rural  Banks  at  reduced  interest  rate  to  meet  the  long  term  investment  credit lending in agriculture. NABARD refinance under LTRCF to SCARDBs and the rate of interest (ROI) applicable in the respective financial year is as under:

## ₹. Crore

|   2014-15 |   ROI* |   2015-16 | ROI*      |   2016-17 | ROI*     |
|-----------|--------|-----------|-----------|-----------|----------|
|     721.8 |   7.85 |   1913.34 | 6.70/6.20 |   1881.73 | 5.4/5.15 |

|                                          | Annexure I to LS USQ 3316 due for 04.08.2017   | Annexure I to LS USQ 3316 due for 04.08.2017   | Annexure I to LS USQ 3316 due for 04.08.2017   | Annexure I to LS USQ 3316 due for 04.08.2017   |
|------------------------------------------|------------------------------------------------|------------------------------------------------|------------------------------------------------|------------------------------------------------|
| Refinance to SCARDBs in Last three years | Refinance to SCARDBs in Last three years       | Refinance to SCARDBs in Last three years       |                                                |                                                |
|                                          |                                                |                                                |                                                | Rs. cr.                                        |
| Sl. No.                                  | Name of the State                              | 2014-15                                        | 2015-16                                        | 2016-17                                        |
| 1                                        | Gujarat                                        | 80.00                                          | 0.00                                           | 80.00                                          |
| 2                                        | Himachal Pradesh                               | 45.02                                          | 63.70                                          | 100.00                                         |
| 3                                        | Karnataka                                      | 236.36                                         | 250.00                                         | 239.73                                         |
| 4                                        | Kerala                                         | 1154.79                                        | 1450.09                                        | 1490.32                                        |
| 5                                        | Haryana                                        | 124.81                                         | 161.39                                         | 100.00                                         |
| 6                                        | Punjab                                         | 532.00                                         | 518.08                                         | 538.30                                         |
| 7                                        | Rajasthan                                      | 171.00                                         | 200.00                                         | 250.00                                         |
| 8                                        | Uttar Pradesh                                  | 450.00                                         | 450.00                                         | 450.00                                         |
| 9                                        | West Bengal                                    | 129.99                                         | 165.00                                         | 150.00                                         |
|                                          | TOTAL                                          | 2923.97                                        | 3258.26                                        | 3398.34                                        |