Maharashtra banks facing cash crunch, farmers feel heat

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BOMBAY, (Internet): Farmers in Maharashtra are worried a lot at a time when cooperative banks in Maharashtra are facing cash crunch due to high default on loans sanctioned in 2007-08. Even those eligible for fresh crop loans are also bearing the brunt of it.

The demand for crop loan in the current fiscal has been estimated at around Rs 95 billion.

The state government today discussed the issue of liquidity crunch at a meeting with the National Bank for Agriculture and Rural Development (NABARD). The meeting was attended by Chief Minister Vilasrao Deshmukh and NABARD Chairman Umesh Chandra Sarangi.

Maharashtra has a strong network of cooperative banks and 75 to 80 per cent crop loan is disbursed through these banks as well as primary credit cooperative societies.

In the last two financial years, crop loans in the range of Rs 60 billion-Rs 65 billion were disbursed. The number is likely to go up to Rs 95 billion as around 3 million farmers have become eligible for loans, said a senior state government official.