Thursday, 22 May 2008

Agricultural advances in banks

A full fledged tug of war on granting loans to borrowers in different segments has been a routine amongst different banks in the country. This trend looks reversed in the present scenario.Banks including major ones like State Bank of India recently took a decision not to grant loans to farmers on the excuse that recovery aspect in such cases is too poor causing immense loss to banks. The Government of India having waived loan repayment considerably in the case of farmers, it resulted into a severe setback on money flow count miserably affecting profitability angle of the concerned banks. Bankers taking a decision to the effect that no further loans be granted to agriculturists to purchase necessary tools like tractor, trolley and other equipments is bound to cause lot of difficulties to the farmers and decision so taken is bound to get reversed as the governmental channels are not for it. This is a normal practice in banks including Reserve Bank of India to look tough in their decisions initially but it hardly takes any time for them to retract the moment the government intervenes. In the case of interest rates in banks the same thing happened only a short time back and so is the likelihood of agricultural loans. Governmental revenue channels thrive on banks but they hardly care for their hardships in transactional imbalances as theirs are decisions dominated by political compulsions. Bankers are required to earn maximum possible profits but the machinery at the governments level hardly bothers for the problems they face in recovering the loans/ advances so granted by them.

Technorati Tags: ,,
Post a Comment