State-run Union Bank of India has seen a pick up in its farm loans in last two months and expects the portfolio to grow by around 18 per cent in FY10, a top official said.
The bank disbursed Rs 2,500 crore new farm loans in the last two months—Rs1,500 crore from indirect lending and Rs1,000 crore from direct loans, Union Bank General Manager, Rural and Agri Business, L N V Rao said.
"Revival is visible in the demand for farm loans in the last two months. We expect the portfolio to grow by 15-18 per cent in the current fiscal," Rao told PTI. At present, total agriculture loan outstanding of Union bank stands at Rs15,300 crore, of which Rs9,200 crore is from the direct lending, Rao said.
The public lender recovered Rs125 crore of farm loans, which had received relief from the government, and expects to recover another Rs150 crore worth loans in the remaining part the year, Rao said.
Due to a weak monsoon, the bank is likely to see a slight rise in its defaults in the indirect lending, Rao said. However, non-performing assets in the farm loan portfolio would remain under manageable level and is likely to decline to 2.2 per cent from 2.5 per cent currently, he said.
Union Bank, which has a total customer-base of around 30 million, has completed 100 per cent core banking solution in its two Regional Rural Banks - Rewa Sidhi Gramin Bank and Kashi Gomti Samyut Gramin Bank.
Both RRBs have a combined customer-base of 4.7 million and a branch strength of 447. Union Bank plans to launch an ATM card for clients of these two RRBs by end-December and extend the biometric card facility to their customers shortly, Rao said.
Comments