Financial exclusion: 40.9 per cent of small, marginal farmers not covered by banks -George Mathew

-The Indian Express

Despite so many initiatives and schemes aimed at financial inclusion, only 40.90 per cent of SMF could be covered by the scheduled commercial banks (SCBs), the report submitted by the RBI panel has said.

The Reserve Bank of India’s Internal Working Group (IWG) to review agricultural credit — headed by Deputy Governor MK Jain — has raised several concerns on the farm front as lakhs of small and marginal farmers (SMF) are yet to be covered by the banking system.

Despite so many initiatives and schemes aimed at financial inclusion, only 40.90 per cent of SMF could be covered by the scheduled commercial banks (SCBs), the report submitted by the RBI panel has said.

On the other hand, the working group has raised concerns over SMF seeking funds outside the banking system. A significant portion, approximately 30 per cent of agricultural households, still avail credit from non-institutional sources only which is a “cause of concern”, the RBI panel said in its report.

At the aggregate level, banks have been able to achieve the sub-target of SMF under the priority sector lending (PSL). “Though this reflects a satisfactory performance in terms of achievement of target by banks, a large proportion of SMF have not been covered by SCBs,” Jain panel said.

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