DFS Urges Banks to Boost Credit Flow to Agri-Allied Sectors

The Department of Financial Services (DFS) reviewed credit disbursement progress in agri-allied sectors, urging public sector banks and stakeholders to meet targets and address regional disparities. The aim is to ensure seamless, affordable credit access, bolstering agricultural growth and employment in rural areas.

The Department of Financial Services (DFS), under the Finance Ministry, held a meeting to assess the status of credit disbursement to agri-allied sectors such as animal husbandry, dairying, and fisheries. Public Sector Banks (PSBs), NABARD, and the State/UT Level Bankers' Committee participated in the review, as reported by the ministry on Wednesday.

M. Nagaraju, the DFS Secretary, urged PSBs to implement necessary steps to meet credit targets for the ongoing financial year. He emphasized the role of state governments in assisting banks to improve credit flow to these sectors. The government sets agriculture credit disbursement targets to ensure farmers receive loans at reduced interest rates.

Nagaraju underscored the significance of the allied sectors in driving agricultural growth and employment in rural areas. He pointed out the existing regional disparities in credit disbursement, directing banks to conduct regional assessments to ensure equitable credit distribution. He also tasked NABARD with collaborating with state departments and LDMs to identify fish farmers and extend the KCC scheme benefits to them.

The Indian government prioritizes ensuring easy access to affordable credit for all allied sectors. DFS is focusing on enhancing credit flow through strategic interventions and building upon previous initiatives like the EASE Reform agenda. These efforts focus on addressing risk assessment, managing NPAs, fostering financial inclusion, enhancing customer service, and promoting digital transformation.

This strategic approach by DFS has significantly bolstered the agriculture sector. Official statistics reveal that agricultural credit rose from Rs. 8.45 lakh crore in 2014-15 to Rs. 21.55 lakh crore in 2022-23. The Kisan Credit Card scheme has been instrumental in providing timely credit access to farmers, facilitating their financial needs efficiently.

(With inputs from agencies.)