Lok Sabha Question No. 112 (STARRED), answered on 2018-02-09
Subject: Bank Loans to Small Farmers
Ministry: FINANCE
Asked by: RAM TAHAL CHOUDHARY, LAXMI NARAYAN YADAV

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

Starred Question No. †*112

To be answered on February 09, 2018/Magha 20, 1939 (Saka)

## Bank Loans to Small Farmers

## †*112. SHRI RAM TAHAL CHOUDHARY: SHRI LAXMI NARAYAN YADAV:

Will the Minister of FINANCE be pleased to state:

- (a)  whether  the  small  farmers  are  unable  to  get  bank  loans  due  to  complicated/ complex procedure/norms of availing loan from banks;
- (b) if so, the details thereof and the reaction of the Government thereto;
- (c) the efforts made by the Government to simplify such procedure/ norms during the last three years; and
- (d) the outcome of the said efforts?

Answer The Minister of Finance (Shri Arun Jaitley)

- (a)  to (d) : A Statement is laid on the Table of the House

Statement referred to in reply to parts (a) to (d) of Lok Sabha Starred Question No.  †*112  to  be  answered  on  09.02.2018  regarding  Bank  Loans  to  Small Farmers  by  SHRI  RAM  TAHAL  CHOUDHARY  and  SHRI  LAXMI  NARAYAN YADAV:

(a) to (d): The details of total amount of loan disbursed to farmers and the share of Small and Marginal Farmers (SF/MF) therein during the last two years, as reported by National Bank for Agriculture & Rural Development (NABARD), are as under:

| Year    |   Total Disbursed Amount ( Rs crore) |   %share of SF/MF in total amount disbursed |
|---------|--------------------------------------|---------------------------------------------|
| 2015-16 |                     915510           |                                       41.51 |
| 2016-17 |                          1.06576e+06 |                                       50.14 |

The Government of India/  Reserve  Bank of India  (RBI)/  NABARD  have,  inter  alia, taken  the  following  major  initiative  for  providing  hassle  free  crop  loans  to  farmers including SF/MF :-

-  With a view to ensure availability of agriculture credit at a reduced interest rate of 7% p.a. to the farmers, the Government of India in the Department of Agriculture, Cooperation  and  Farmers'  Welfare  implements  an  interest  subvention  scheme  for short term crop loans up to Rs. 3.00 lakh. The scheme provides interest subvention of 2% per annum to Banks on use of their own resources.  Besides, additional 3% incentive is given to the farmers for prompt repayment of the loan, thereby reducing the effective rate of interest to 4%.
-  As per RBI directions, Domestic Scheduled Commercial Banks are required to lend  18%  of  the  Adjusted  Net  Bank  Credit  (ANBC)  or  Credit  Equivalent  to  OffBalance Sheet Exposure (CEOBE), whichever is higher, towards agriculture. A subtarget of 8% is also prescribed for lending to small and marginal farmers including landless  agricultural  labourers,  tenant  farmers,  oral  lessees  and  share  croppers. Similarly,  in  the  case  of  Regional  Rural  Banks  18%  of  their  total  outstanding advances is required to be towards agriculture and a sub-target of 8% has been set for lending to small and marginal farmers.
-  Under the Kisan Credit Card (KCC) Scheme, a flexible limit of Rs. 10,000 to Rs. 50,000 has been provided to marginal farmers (as Flexi KCC) based on the land holding  and  crops  grown  including  post  harvest  warehouse  storage  related  credit needs  and  other  farm  expenses,  consumption  needs,  etc.,  plus  small  term  loan investments without relating it to the value of land.
-  RBI  has  conveyed  to  Banks  to  waive margin/security requirements of agricultural loans upto Rs.1,00,000/-. The requirement of 'no due' certificate has also been dispensed with for small loans up to Rs.50,000 to small and marginal farmers, share-croppers and the like and, instead, only a self-declaration from the borrower is required
-  To  bring  small,  marginal,  tenant  farmers,  oral  lessees,  etc.  into  the  fold  of institutional credit, Joint Liability Groups (JLGs) have been promoted by banks.