Calcutta, March 1: The National Bank for Agriculture and Rural Development (Nabard) has estimated a 12 per cent growth in credit flow to priority sectors by banks in Bengal in 2013-14.

The development comes at a time bankers are concerned over higher provisioning.

Nabard today released the focus paper for Bengal where it pointed out that credit flow to priority sectors was expected to increase to Rs 58,034 crore in the 2013-14 from Rs 51,710 crore a year ago.

The paper estimated that crop loan at Rs 28,274 crore would constitute 49 per cent of total credit, while medium and small enterprises and other priority sectors would get Rs 15,634 crore and Rs 5,298 crore, respectively.

Besides, term loans of Rs 8,826 crore have been projected for various activities, including poultry, farm mechanisation, storage godown, dairy development, plantation and horticulture. Nabard officials said the target, if met, could improve the credit-deposit (CD) ratio in rural Bengal to over 50 per cent from 44 per cent. Bengal’s overall CD ratio stands at 64 per cent, largely on account of loans offered by metropolitan branches.

S. Padmanabhan, chief general manager of Nabard, said banks in Bengal reached close to 80-82 per cent of their priority sector lending target in 2011-12 and urged them to increase their lending to priority sector. According to finance department officials, the number could come down to nearly 65 per cent in 2012-13.

Bankers said the low recovery rate and high risks associated with such lending often created a fear psychosis among lenders.

“Our officers are often hesitant to lend out to such sectors because of poor recovery and high probability of non-performing assets,” a senior bank official said on condition of anonymity.

Higher provisioning made on bad loans had put pressure on the bottomline of banks; three major city-based state-run lenders — Uco Bank, the United Bank of India and Allahabad Bank — posted a fall in net profit in the third quarter ended December.