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Posted on Nov 20, 10:00PM | UNI
Karnataka Chief Minister Jagadish Shettar today urged the banks and financial institutions to take a proactive approach to credit flow and assured all policy support to the banks to meet the credit needs of the state.
Speaking at the meeting of Southern Chief Ministers and PSU banks and financial institutions chaired by Union Finance Minister P Chidambaram, Mr Shettar lamented the banks and FIs were adopting extremely cautious approach that had led to negative growth or under achievements in case of loans to weaker sections and minority communities and loans for educational purposes.
"The state has the potential and need for higher levels of credit," he added.
Similarly he also pointed out the lower limit of Rs 4,612 crore earmarked for priority sector disbursement this fiscal, was lower as compared to credit flow achievement of Rs 55,231 crore in 2011-12.
Following the Karnataka's intervention it was enhanced to Rs 55,000 crore.
As priority sector lending was expected to have a multiplier impact on the economy and assist employment generation, the banks need to adopt a more ambitious approach, he added.
With regard to agricultural credit, he urged Mr Chidambaram to facilitate long term refinance from NABARD for medium and long term loans at part with the crop loans.
Implementation of recommendations of Vaidyanathan Committee for revival of cooperative long term credit structure might also be expedited, he said. NABARD should also open refinance window for loans to agri-based industries which were assisted through the state finance corporations, he added.