abhishreshthaa
Abhijeet S
As per the above evaluation of the major problems and issues relating to the rural financial system I can submit the following observations & recommendations:
Interest rates: Interest rates must be different for different categories. First it should be concessional rate exclusively for small and marginal farmers at 1.5% to 11.5% & Secondly, there should be a higher rate of interest applicable to the rest of the agricultural borrowers upper limit for it is15.5%
Infrastructure Development: tempo of agricultural lending has been low in the eastern regional states like Bihar, Orissa and West Bengal & in the North Eastern States. So Agricultural and Rural Infrastructure Development Corporation should be setup in these area which will concentrate on building up necessary backward and forward linkages and supporting services as well as formulate location specific schemes for accelerating the transformation of agriculture and to arrange for funding of the schemes.
Insurance scheme: Crop insurance scheme which was introduced in India from Kharif 1985 covering major cereal crops, oilseeds and pulses. The sum insured was limited to Rs.10,000 per farmer irrespective of quantum of crop loan and the total sum insured would be limited to 100 percent of the crop loan disbursed. Proper research should be done by statutory crop insurance corporation.
Recovery of dues: Recovery is important for survival of the banks, it is important that a common legal framework covering cooperatives and commercial banks for recovery of dues for the country as a whole should be formulated. & The government should setup State level tribunals for adjudication.
Rationalisation: In present scenario each village is allotted to a commercial bank branch under the Service Area approach. As per the analysis each block should be allotted to a bank which has the largest presence in the block through its branches. Which will reduce the cost of supervision, improve quality of monitoring and be beneficial to the customers.
Interest rates: Interest rates must be different for different categories. First it should be concessional rate exclusively for small and marginal farmers at 1.5% to 11.5% & Secondly, there should be a higher rate of interest applicable to the rest of the agricultural borrowers upper limit for it is15.5%
Infrastructure Development: tempo of agricultural lending has been low in the eastern regional states like Bihar, Orissa and West Bengal & in the North Eastern States. So Agricultural and Rural Infrastructure Development Corporation should be setup in these area which will concentrate on building up necessary backward and forward linkages and supporting services as well as formulate location specific schemes for accelerating the transformation of agriculture and to arrange for funding of the schemes.
Insurance scheme: Crop insurance scheme which was introduced in India from Kharif 1985 covering major cereal crops, oilseeds and pulses. The sum insured was limited to Rs.10,000 per farmer irrespective of quantum of crop loan and the total sum insured would be limited to 100 percent of the crop loan disbursed. Proper research should be done by statutory crop insurance corporation.
Recovery of dues: Recovery is important for survival of the banks, it is important that a common legal framework covering cooperatives and commercial banks for recovery of dues for the country as a whole should be formulated. & The government should setup State level tribunals for adjudication.
Rationalisation: In present scenario each village is allotted to a commercial bank branch under the Service Area approach. As per the analysis each block should be allotted to a bank which has the largest presence in the block through its branches. Which will reduce the cost of supervision, improve quality of monitoring and be beneficial to the customers.