| Adsul: Tone-up message
New Delhi, June 25 (PTI): The government today pulled up some of the public sector banks for not meeting agriculture loan targets but praised a hefty 37 per cent rise in operating profits aggregating at over Rs 21,000 crore.
The government also lauded banks for reducing non-performing assets to 4.5 per cent in 2002-03, which is expected to fall further to 2.0 per cent this fiscal.
“Some banks have not fulfilled the 18 per cent target for extending loans to the agriculture sector,” minister of state for finance, Anandrao Adsul, said after a review meeting with the heads of public sector banks.
The finance ministry has directed the banks to meet the target and step up lending to the farm sector to Rs 7,00,000 crore by 2007 from the present Rs 2,00,000 crore.
Adsul said banks should step up efforts to issue kisan credit cards to all eligible farmers. Banks have so far issued about 97 lakh cards.
Enthused by the overall performance, Adsul said there are no “weak” banks in the public sector after Indian Bank came out of the red. “All the banks performed well profit-wise and in totality,” he said.
Operating profits of the public sector banks grew by a robust 37 per cent at over Rs 21,000 crore while net profit was over Rs 8,000 crore.
Indian Banks’ Association chairman Dalbir Singh said net NPAs came down to 4.5 per cent of net advances last fiscal from 6-7 per cent in 2001-02.
“We are targeting to bring it down to 2.0 per cent in 2003-04,” he said.
Singh said the reduction of NPAs could be achieved through various initiatives, including the use of securitisation laws, debt recovery tribunals and RBI’s one-time settlement scheme.
“The securitisation Act itself will bring financial discipline in the banking system,” he said.
The IBA chairman said the growth in overall deposits and loan advances have also been robust during the last financial year. “We will be able to show better results in this fiscal,” he added.
Admitting there was shortfall in meeting the agriculture loan targets by some of the banks, he said all the banks are expected to meet the priority sector lending target in a year.
This was vital as agriculture was a major contributor to the gross domestic product (GDP).
Singh said the banks also identified new areas which would witness higher credit growth in the coming years.