FM asks Banking Secretary to submit a report on banks’ disbursal of KCC loans


Finance Minister Nirmala Sitharaman on Tuesday asked Department of Financial Services Secretary, Vivek Joshi, to submit a report in a month on the cause of slower disbursal of farm credit under the Kisan Credit Card (KCC) scheme by scheduled commercial banks, while assuring that banks will comply with uploading of necessary data by December 31.

Launching the Kisan Rin Portal (KRP) and KCC Ghar Ghar Abhiyaan, a campaign to extend the benefits of KCC to every farmer, Sitharaman said that the disbursal and sanctioned credit under KCC by both scheduled commercial banks (SCBs) and co-operative sector are completely opposite. While the sanctioned credit by SCBs is higher than the in co-operative sector, in the case of disbursal, the share of SCBs is lower than co-operatives.

Active loan

Earlier in the conference, the CEO of Pradhan Mantri Fasal Bima Yojana, Ritesh Chouhan made a presentation showing that out of ₹8.47 lakh crore sanctioned, the share of SCBs was 58 per cent whereas in the total active loan under KCC (means disbursal) by all institutions, the share of SCBs is 37 per cent. On the other hand, the share of the co-operative sector was 22 per cent and regional rural banks (RRBs) was 20 per cent in sanctioned KCC loan. But in disbursal, the share of the co-operative sector was 46 per cent and RRBs was 17 per cent.

“The difference between sanctioned amount and disbursal varies significantly. The SCBs seem to sanction better but disburse less. Whereas the co-operative sector has lower sanctioned amount but higher disbursal. I need to understand why there is such a sharp opposite performance between SCBs and cooperative banks,” she said.

As the Agriculture Ministry will start the campaign under KCC from October 1 and all data have to be uploaded by all banks, cooperatives and RRBs by December 31, Sitharaman assured that the banks will definitely abide by the deadline as this would cover 7.3 crore KCC beneficiaries which also include fishermen and dairy farmers.

Aim of KCC

Sitharaman said that the government has allocated enough money under KCC scheme to ensure easy short-term loans to farmers and their onboarding for the scheme. Further, she said that real-time estimation of crops will help the economy and ensure right prices for farmers at the end of the crop season.

Addressing the event, Agriculture Minister Narendra Singh Tomar said that the budget for Ministry of Agriculture has increased from ₹23,000 crore (2013-14) to ₹1,25,000 crore (2023-24). He also said that as there are around 9 crore beneficiaries identified and verified under PM Kisan scheme, the aim of KCC Ghar Ghar Abhiyaan is to connect around 1.5 crore beneficiaries who are not yet covered under KCC scheme.

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