Hyderabad: After the RBI, the AP government is now planning to approach the National Banks for Agriculture and Rural Development (NABARD) for rescheduling the crop loans of cooperative banks as they are not under the preview of the RBI.
Cooperative and rural banks also have given considerable amounts to farmers as crop loans.
According to official records, cooperative banks have given Rs 5,625 crore as crop loans and Rs 547 crore as gold loans. Farmers in the state have 15,78,657 crop loan accounts and 77,008 gold loan accounts with cooperative banks.
Various rural banks also gave Rs 7,590 crore as loans to farmers. Of this, Rs 4,329 crore was crop loans for 7,68,686 accounts and Rs 3,261 crore was gold loans for 4,30,095 accounts.
Since commercial Banks are resource based institutions, they would be in a position to issue fresh loans after reschedulement of crop loans. However, the cooperative institutions will not be able to give fresh loans unless they are facilitated with medium term conversion loans from NABARD.
Finance officials, however, say that it may not be possible for NABARD to meet all the requirements of Andhra Pradesh as the balance amount available with NABARD under the long-term operation is only about Rs 1,485 crore.
Against this background, the state government wants to ask NABARD to make alternative arrangement of funds for meeting the full requirement of cooperative institutions.
The state government is also looking at other options in case NABARD is not able to give financial assistance to cooperative banks. The State Cooperative Bank may approach commercial banks for temporary accommodation and if necessary, the state government will stand guarantee.
Rural banks too will have a liquidity crunch to issue fresh loans after the crop loans are rescheduled. They may approach the concerned sponsor banks to provide support. But the sponsor banks should be in a position to provide the needed financial support.
AP Finance Minister, Mr Yanamala Rama Krishnudu, said that the state government would approach NABARD on the waiver of farm loan issue and that NABARD could give advance loans to the cooperative banks.
