Debt Recovery Guru - Debt Collection India Portal, Latest Indian Credit Industry News , Jobs, Events, Directory

Saturday
Nov 18th
Text size
  • Increase font size
  • Default font size
  • Decrease font size
Home Best Practices

Best Practices

Govt: Agricultural Credit Risk Fund a safeguard from bad debts

Govt: Agricultural Credit Risk Fund a safeguard from bad debts
 
The government in an effort to encourage banks to provide loan to the drought stricken agriculture sector has been contemplating on setting up an agriculture credit risk fund. 

"We have received various propositions from banks, banking association IBA and even the Reserve Bank. We are looking at all options," the official said. An RBI committee headed by MV Nair had also recommended a Credit Guarantee Scheme for small and marginal farmers.

The Nair Committee had suggested that the scheme may be initially tried out for five years as a pilot project, and depending on its success, it may be expanded to cover bigger credits.

"We have to look at the cost implication. Any such fund cannot be set up solely through budgetary allocation. Further, in the long term, sustainability of the fund also needs to be worked out," the official said.
 
A senior official with Indian Banking Association (IBA) said that such a fund could be set up with contributions from Central, state governments, Nabard and commercial banks.

"We had proposed that a nominal charge should be passed on to the borrower and the lock-in period may be kept at minimum for such a cover. For example, it could be an annual cover for every crop season," he said.
 
In a meeting held recently, the Reserve Bank of India (RBI) governor D. Subbarao citied that the reason for increase in the bad loans to 47% is because of a “lagged effect of double-digit growth” in bank credit to the sector and a slowing economy, he said.

Banks feel that such a fund will substantially bring down the bad loans in the sector. "Today, PSBs have to bear the delinquency cost of lending to agriculture sector, which constitutes a significant proportion," said the chairman of a South-based state-run bank, adding the move may also reduce the cost of lending towards agriculture sector.
 

Committee to monitor banks' bad loan recovery

Committee to monitor banks' bad loan recovery

A two-member committee has been created by Finance Ministry to follow-up all cases of loss assets with each public sector bank (PSB). The committee has also been asked to...

India’s first mortgage guarantee entity launched

A joint venture spearheaded by National Housing Bank (NHB), US-based financial security company Genworth, the Asian Development Bank and the International Finance Corpora...

Recovery Camps by SBI to settle bad debts

PATNA: In an effort to get rid of bad loans, State Bank of India ( SBI) is planning to hold special adalats in Bihar and Jharkhand on June 25 to settle loan accounts pert...

Defaults in Home Loans witnesses decline

The Credit Information Bureau of India ( Cibil) in a recent survey pointed out that more than 88% of new home loan borrowers acquired by banks during 2011 had a credit sc...

Delhi district court orders Citicorp Finance to apologise

In January-February 2008, Citicorp moved an application before a district court which said Kailash Prajapat had defaulted in paying instalments for his loan and, hence, t...

Banks want timeline set for firms to exit debt recast mechanism

Banks are likely to set a timeline for the exit of distressed companies from the Corporate Debt Restructuring (CDR) mechanism.

This move is being considered as there are m...

Mukherjee tells DRTs to help expedite the process of NPA recovery

Finance Minister Pranab Mukherjee, while addressing a conference of  chairpersons of DRATs (debt recovery appellate tribunals) and presiding officers of DRTs (debt recove...

Increase in property mortgage by banks to recover home loan default

Banks have become increasingly vigilant over non -payment of loans and are sending possession notices even for dues as low as Rs 1.5-2 lakh.
 
“This is because of the worri...
  • «
  •  Start 
  •  Prev 
  •  1 
  •  2 
  •  3 
  •  4 
  •  5 
  •  6 
  •  Next 
  •  End 
  • »
Page 1 of 6

Advertisement

Advertise on Debt Recovery Guru. Check out options by clicking here!

Advertisement

Advertise on Debt Recovery Guru. Check out options by clicking here!

Newsletter

Follow DRG

TwitterFacebookFeed

Polls

How is the Debt Recovery Industry's Reputation in India?
 

Advertisements