Lok Sabha Question No. 3987 (UNSTARRED), answered on 2018-08-10
Subject: Credit Delivery for Agriculture
Ministry: FINANCE
Asked by: RITA TARAI

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

Unstarred Question No. 3987

To be answered on Friday, August 10, 2018/Shravana 19, 1940 (Saka)

## Credit Delivery for Agriculture

3987. SHRIMATI RITA TARAI:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Government has noted that inadequate credit delivery for the agriculture and other priority sectors is a hindrance in promoting economic activity and increasing the level of income of the people in the aspirational districts and if so, the details thereof;
- (b) whether there is any proposal for enhancing delivery of credit for the priority sectors by the commercial banks; and
- (c) if so, the details thereof and the time by which it is likely to be implemented?

## Answer

The Minister of State in the Ministry of Finance (Shri Shiv Pratap Shukla)

- (a)  to  (c):  As  reported  by  National  Bank  for  Agriculture  and  Rural  Development (NABARD), total  agriculture  credit  disbursement  during  the  year  2015-16,  2016-17  and 2017-18 was Rs. 9,15,509.92 crore, Rs. 10,65,755.67 crore and Rs. 11,68,502.84 crore respectively.

In terms of RBI's Master Direction dated July 07, 2016 on Priority Sector Lending-Targets and Classification, a target of 40 per cent of Adjusted Net Bank Credit (ANBC) or Credit Equivalent amount of Off-Balance Sheet Exposures (OBE), whichever is higher, has been set for lending to the priority sector by domestic scheduled commercial banks and foreign banks with 20 and above branches. Within this, a sub-target of 18 per cent of ANBC or Credit  Equivalent  amount  of  OBE,  whichever  is  higher,  has  been  prescribed  to  all domestic  Scheduled  Commercial  Banks,  including  Small  Finance  Banks,  for  lending  to Agriculture.

As against target of 40% of ANBC or Credit Equivalent amount of OBE for total priority sector  lending,  the  achievement  in  respect  of  Commercial  Banks  was  40.12%,  39.13% and 40.09% in the year 2015-16, 2016-17 and 2017-18 respectively, as reported by RBI. For agriculture Advances, against target of 18% of ANBC or Credit Equivalent amount of OBE, the achievement in respect of Commercial Banks was 17.05%, 16.88% and 17.05% in the year 2015-16, 2016-17 and 2017-18 respectively, as reported by RBI.

RBI has informed that, there exist appropriate provisions to monitor the performance of banks  against the stipulated targets/ sub-targets, including Agriculture.  To  ensure continuous flow of credit to priority sector, the guidelines have also prescribed monitoring of priority sector returns figures on 'quarterly' basis.

As per the directions of RBI, Scheduled Commercial Banks having any shortfall in lending to  priority  sector  shall  be  allocated  amounts  for  contribution  to  the  Rural  Infrastructure Development Fund (RIDF) established with NABARD and other Funds with NABARD/NHB/SIDBI/ MUDRA Ltd., as decided by the Reserve Bank from time to time. The interest rates on banks' contribution to RIDF or any other Funds, tenure of deposits, etc. shall be fixed by RBI from time to time. Further, non-achievement of the priority sector targets/  sub-targets  are  also  taken  into  account  by  RBI  while  considering  regulatory clearances/ approvals for various purposes to the banks.