New Delhi: The government undertaking banks disbursing heavy loans to farmers are now crying for help as they are finding it tough to recover the offered loan. These banks have approached the government seeking help in the debt recovery from the farmers.

The issue of loan recovery from the agricultural sector as well as the problem of increasing Non Performing Assets (NPAs) will be raised by the banks in a sheduled meeting with Finance Minister Pranab Mukherjee.

Mukherjee has convened a review meeting of government banks on April 26 where he will discuss policies pertaining to bank loans. In addition to this, the debts incurred due to non performing loans will also be mulled over.
It is expected that the Finance Minister will direct the banks to disburse loan worth Rs 4, 75,000 crore to the farmers.

In the first nine months of the last financial year 2010-11, NPAs stood at Rs 38,469 crore. This amount comprises the total 60 per cent of banks new NPAs.
The agriculture sector NPAs are in the worst condition amounting to Rs 12,733 crore which is 70 percent more in comparison to last year’s amount.

Out of 29 government banks, the NPAs of 14 banks witnessed 100 percent growth. Other primary sectors (such as education loan, housing loan, export loan) saw an accumulation of new NPAs worth Rs 13,240 crore which is 27.4 per ent more compared to the previous year.

The government banks want the Finance Ministry to chalk out a plan to recover the loans given to primary sectors as they are unable to pressurise farmers or small entrepreneurs. They resort to the use of Debt Recovery Tribunal (DRT) or Securities Law for recovery of NPAs in the primary sector without much success.

According to the existing rules, banks have to disburse 40 percent loan to the primary sector while 18 percent is reserved for agriculture or related sectors.