A new political regime of financial sector reforms in the first place responsible for the slow growth in rural financial institutions for agriculture, especially in the decade 1991-2000 and beyond low-power, research paper said.
“Rural Credit System includes the rural branches of banks, rural credit cooperatives, regional institutions and banks (RRBs) has been seriously neglected because of adverse conditions, the financial sector reforms, Gokhale Institute of Politics and Economics (University), Faculty, Deepak Shah, said in his research work entitled “Why the slower growth in finance by RFI in Maharashtra. The rural financial institutions in Maharashtra have shown not only in its slow growth of loans advances and other operational indicators for the period from 1991, 2000, but after poor performances, he said.
The credit cooperatives, in particular, have clearly shown high non-performing assets to Maharashtra. The share of Maharashtra total NPAs of Heads of State and in all banks Raiffeisen level of India rose from 31.76 percent in 2002 to 43.16 percent in 2004, he said.
Not only that, in most districts of Vidarbha Konkan and parts of Maharashtra have shown that less than 60 per cent of the deposit of their credit report commercial banks. Given the decline in the credit deposit report of several banks may have adverse effects on living conditions or the rural population in these districts of Maharashtra, he said in his paper.
Vidarbha region also shows not only very low brightness of cash by credit cooperatives, but also decrease the proportion of loans for the harvest of cotton vis-à-vis other crops, research paper said.
A negative effects of the slowdown in loans to advances for the crops of cotton and other crops for agriculture in this region, where a considerable number of cotton farmers have committed suicide, either because of the absence Progress on loans or because they pressure from various financial institutions as regards the reimbursement of the loan, despite the failure of harvest, “said Shah.
With a revitalization of agricultural credit Delivery System, it is necessary to fight against the problems in front of which two, namely increasing NPAs with the reduction in appropriations report filing and retrieval of rural poor performance of financial institutions, with the exception of adopting innovative approaches such as the relationship of the individual and groups of non-governmental organizations with mainstream financial institutions, said the paper.
As for the scenario of rural credit, one of the most welcome recent developments has been put in place the infrastructure of rural development by the Fund of NABARD, in order to promote loans to governments and state enterprises to speed up ongoing projects, particularly those related to the medium and irrigation Moll, Soil Conservation, Watershed Management, he said. However, the use of this fund is dark, only 30 per cent, the paper said.
The rural financial institutions are struggling with high NPAs or overdues, both front and rear areas of compatibility. It is therefore a need for more stringent measures and consistent for the recovery of loans to borrowers chronic and serious.
In short, to reduce rural credit Delivery System, the problems the system is indeed growing NPAs with the reduction in appropriations filing report, high transaction costs and poor performance reimbursement, which is to eliminate jurisprudence fiscal reserve of over exemplary punishment for wilfull defaults, particularly by large farmers, Shah.
