Union Finance Minister Nirmala Sitharaman has called on rural banks to scale up credit disbursement to meet the growing demands of the agriculture and allied sectors, according to a Finance Ministry statement issued on Friday.
Chairing a meeting at Karnataka Grameena Bank (KaGB) in Ballari, the Finance Minister reviewed key performance indicators including credit growth, non-performing assets (NPAs), financial inclusion achievements, and implementation of government-sponsored schemes.
FM Sitharaman emphasized the need to tap the potential of allied agriculture activities, directing KaGB and Canara Bank to collaborate with state government departments to increase credit flow to MSMEs and allied sectors. She highlighted that the rationalisation of GST rates has created opportunities in rural areas by boosting consumption, presenting an avenue for rural banks to expand funding in semi-urban and rural regions.
"The capital requirements of Farmer Producer Organisations (FPOs) are often met by Development Financial Institutions and Government Departments. However, their working capital needs should be fulfilled by banks," the Finance Minister said. She urged rural banks to upgrade products and services according to FPO requirements to ensure mutual benefits and sustainable rural growth.
FM Sitharaman also pointed out the trend of companies relocating services from tier-1 to tier-2 and tier-3 cities, advising rural banks to focus on such emerging markets to strengthen financial health. She called on KaGB to improve business operations, profitability, and address challenges posed by stressed assets.
The Finance Minister further instructed KaGB and its sponsor bank to work closely with panchayat-level committees to streamline the screening of applications under government schemes such as PM-Vishwakarma and PMFME. She also encouraged KaGB to expand its branch network in the Kalyan Karnataka region, improve operational efficiency, adopt modern technology, enhance asset quality, and strengthen customer service delivery.
DFS Secretary M. Nagaraju highlighted KaGB's successful integration post-amalgamation and stressed the importance of a medium-term business plan for long-term sustainability. He underscored the region's potential in agro-processing and MSMEs, urging KaGB to partner with NABARD to enhance value creation for farmers.
Nagaraju appreciated KaGB's progress under Atal Pension Yojana and suggested improving performance in other financial inclusion schemes such as PMJJBY, PMSBY, and PMJDY, while partnering with public sector banks to expand services in unserved and underserved areas.
This push from the Union Finance Minister signals a renewed focus on strengthening rural banking, promoting financial inclusion, and supporting the growth of agriculture and allied sectors in Karnataka and across India.
CAclubindia
