'FDI in retail to improve loan recovery from farmers'

Batting for FDI in multi-brand retail, a representative body of Cooperative Agriculture Banks Federation, NCARDBF, on Thursday said it will help farmers to fetch better returns and also lead to improvement in recovery of loans from farmers.

"Definitely, FDI in retail will result in more income for farmers as big international retailers will be procuring agricultural commodities directly from them and paying them more while eliminating the middlemen," NCARDBF Managing Director KK Ravindran told reporters.

National Cooperative Agricultural & Rural Development Banks' Federation Limited (NCARDBF) also said the increase in the farmers' income would also lead to improvement in recovery of loans from farmers.

"As farmers will be benefited (because of FDI in retail), we will also be benefited. They (farmers) will return our money and there will be improvement in recovery and thereafter more funds could be deployed in agriculture," NCARDBF Chairman K Sivadasan Nair said.

State Cooperative Agriculture and Rural Development banks are functional in 19 states except Maharashtra, Assam, Orissa and Tripura. The total outstanding finance including investment credit to agriculture sector by banks is pegged at Rs15,800 crore with NPA level of 20%.

The loan recovery of these banks in the country was 45.6 per cent last year, though NCARDBF, MD, KK Ravindran expected that the loan recovery would improve in current fiscal year than that of last financial year.

During the conference, the apex body of cooperative lending structure sought from the Centre to turn the cooperative agriculture and rural development banks to full fledged banks like commercial banks operating in the country.

"We want that RBI should allow us to function like a commercial bank and then we can accept deposit like banks which can be used for other banking services other than financing to farm sector," Ravindran said.

"There are some cooperative banks operating like Punjab, Kerala, Rajasthan, West Bengal which are running efficiently and they can be converted into a full fledged banks," added Ravindran.