ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Agricultural CreditSubscribe to Agricultural Credit

Are Gold Loans Glittering for Agriculture?

Credit is essential for small and marginal farmers in India, whose low incomes limit savings, making them more vulnerable to several risks. Priority sector lending norms have channelled more formal credit to this sector. The interest subvention scheme for short-term crop loans makes formal credit more economical for farmers. However, there are issues of accessibility, most notably arising out of difficulties in presenting documentation, giving rise to a prevalence in the use of gold/jewellery as collateral. Loan data from three districts in Karnataka has highlighted some important lessons. The use of gold tends to exclude poorer farmers from availing all the benefits of the scheme, and poses issues of accessibility to formal credit. Digitisation of land records and farmer information, coupled with reduced recognition of gold loans in priority sector lending can be valuable to the Indian agriculture sector.

Signs of Incipient Industrial Recovery

Reflecting the incipient and selective upturn in the industrial sector, there has been a sizeable turnaround in non-food bank credit in the first quarter of 2002-03. A major disappointment, however, has been the term-financing institutions whose sanctions and disbursements were sharply lower in 2001-02 than in the preceding year.

Cost of Credit of Commercial Banks in a Deregulated Environment

This study analyses the cost of credit of commercial banks in a deregulated environment on the basis of BSR data in respect of large borrowal accounts. As subsidisation of interest rates either with reference to priority sectors or size of loans has virtually vanished, there is imperative need to evolve a suitable information system in respect of small borrowal accounts on a par with that for large accounts, preferably through repetitive sample surveys.
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