Nabard fund delay: No cash with coop banks for crop loan

BHUBANESWAR:With Kharif operation in full swing, the cooperative credit structures of the State are struggling to meet the increasing demand for crop loan from farmers due to lack of refinance support from National Bank for Agriculture and Rural Development (Nabard).

The Odisha State Cooperative Bank (OSCB) and District Central Cooperative Banks (DCCBs) have already financed Rs 5363.38 crore of crop loan to around 14.38 lakh farmers.Of the total crop loan disbursed till date, OSCB is reported to have provided 70 per cent while the balance 30 per cent has been arranged by the DCCBs. “The entire finance has been arranged from own resources of OSCB and 17 DCCBs. The DCCBs are facing severe cash crunch to meet their requirement,” sources in the Cooperation department said.To cope with the credit requirement, these banks largely depend on Nabard refinance, which is around 45 per cent of the total grassroots level disbursement, the sources added.

The chief executive officers (CEOs) of some of the DCCBs have expressed their helplessness to arrange further funds for lending purpose. “Unless Nabard refinance is arranged immediately, crop loan disbursement may be seriously affected in the State,” said one of the CEOs who did not want to be named.
Though Nabard had sanctioned the refinance limit for the State during July last year, the national bank is yet to communicate the quantum of support it will provide for the current year. Usually, the refinance facility is provided to the State Cooperative Bank by April every year.

As per reports, Nabard has sanctioned refinance limit of Rs 4,100 crore in favour of OSCB and the financial assistance will be available only after August 15.While the crop loan refinance carries concessional interest rate of 4.5 per cent per annum, the national bank is stated to have sanctioned additional crop loan refinance limit at the interest rate close to eight per cent which will put the cooperative banks in great difficulties.

The cooperative banks provide crop loans to the farming community to the extent of 65 per cent of the total loans disbursed by all commercial banks operating in the State.As per the guidelines of Pradhan Mantri Fasal Bima Yojana (PMFBY), all the notified crops are required to be covered under crop insurance by July 31. “Now that the date is over and no further relaxation would be given by the Central Government, a good number of farmers are likely to be left out of PMFBY and will suffer in case of natural calamities affecting their crop in future,” the sources said.The State Government has planned to provide crop loan to the tune of Rs 12,200 crore to farmers during kharif and rabi seasons.