According to the statement issued by the Finance Ministry on Friday, October 17, Union Finance Minister Nirmala Sitharaman has urged rural banks to increase the disbursement of agriculture credit to fulfill the rising demand. While reviewing a meeting to assess the business performance of the Karnataka Grameena Bank (KaGB) at Ballari, the minister evaluated the key indicators including credit growth, NPAs, performance under financial inclusion and implementation of Govt- sponsored schemes.
What the FM instructed apart from agriculture credit?
Not only this, but the finance minister also instructed all stakeholders to take significant steps to realise the potential of ailing agricultural activities in the region. Notably, KaGB and Canara Bank were instructed to work with the state government departments to raise the credit disbursement to MSME and allied sector.
Rationalisation of GST rates granted new opportunities
Furthermore, she said that the rationalization of GST rates has granted new opportunities in rural areas due to a rise in consumption, signaling that of more funding by banks. In addition, she appealed to the rural banks to scale up this opportunity to serve the credit requirements of rural as well as urban areas.
The Minister emphasized that rural banks should upgrade their products and services as per the convenience and demand of Farmer-Producer Organisations. This will allow both Banks and FPOs to leverage their resources for mutual benefit and sustainable growth of the rural economy. Moreover, she added that several companies are moving their services, such as data centre services, from tier-1 to tier 2 and 3 cities. The rural banks should stress on such emerging areas to strengthen their financial health. KaGB should focus on its business operations to make the bank profitable and overcome the challenges battled by stressed assets. Her final recommendation was that KaGB and Sponsor Bank to link to respective committees at the panchayat level to enhance the screening process of applications received under Government-sponsored schemes like PM-Vishwakarma and PMFME.