All banks operating in the J&K state have disbursed Rs.559 crores to the priority sector during the first quarter of the current financial year as against the annual target of Rs.2305 crores. J&K Bank alone has disbursed Rs.351.43 crores, which accounts for an achievement of 39% on the annual target. Overall target achievement has been recorded at 24.23% by all banks.
This was revealed in the 77th meeting of J&K SLBC presided over by Dr Haseeb A Drabu Chairman and CE J&K Bank and Convenor J&K SLBC. The performance of banks/financial institutions operating in the state in extending credit to priority sector as at the end of June 2009 under Annual Credit Plan (ACP) 2009-10 was reviewed in the meeting.
The meeting was attended by Principal Secretary Industries and Commerce, Mr Anil Goswami, Commissioner Secretary Finance, Mr. Sudhanshu Panday, Commissioner Secretary Labour and Employment, Mr. F A Peer, Executive Directors of J&K Bank, Mr. A. K. Mehta and Mr. Abdul Majid Mir, Senior Officers of Reserve Bank of India, Chief General Manager NABARD (J&K), representatives of various departments, development agencies, banks, financial institutions operating in the state.
Dr Drabu said that the lending in the Agriculture Sector has been greater than SME Sector for the first time. The achievement of target in the agriculture sector has been 24 % while the figure stands at a meager 16% in case of SME Sector. In agriculture sector an amount of Rs. 130 crore have been disbursed to 24,218 beneficiaries against the annual target of Rs 545 crore for 1, 11,317 beneficiaries thereby achieving 24% in financial and 22% in physical target.
Dr. Drabu attributed less credit absorption by the SME's to multiple factors. "SME's emerged as the biggest point of concern for the first time in the first quarter," Dr Drabu said, "the problem of the choking of the SME's needs a serious consideration." J&K Bank has been a major contributor to the achievements under SME sector. Out of the total disbursement of Rs123.81 crore against an annual target of Rs.771 crore for all participating banks. J&K Bank alone has disbursed Rs 80.60 crore against the target of Rs 309.26 crore thereby achieving a financial target of 26%.
Dr Drabu pointed out that the status of sponsored schemes has been poorer than ever. The banks have disbursed an amount of Rs. 26.30 crore to 2948 beneficiaries with achievement of 9% and 8% in financial and physical terms respectively.
A slump in Micro Credit has also been registered in this quarter. A review on the matter was sought by the convener of the meeting. Lack of awareness and low financial literacy were seen as the contributing factors. NABARD which holds workshops and awareness campaigns on the matter agreed to hold a few more to tackle the problem.
Meanwhile, the members also deliberated upon the idea of lending to organizations like Women Development Corporation who in turn lend exclusively to women so as to increase the lending to women. "If the end use is not in question this is a good way of increasing lending in this sector as these organizations are always short of funds ", said Dr Drabu.
An appeal by artisans and weavers to decrease the rate of interest on advances as they were hit by recession was discussed. The demand for restructuring of the loans by artisans and weavers was also looked into and it was decided that the modalities would soon be worked out.
Opening of bank branches in un-banked and under-banked areas of Pahloo, Duggan, Gundana, Nagansani and Wadwan were also taken up.