With farmers “stopping” repayment of crop loans because of debt waiver of up to Rs 2 lakh, non-performing assets under agriculture loans have risen to nearly Rs 9,000 crore in Punjab, bankers said.
“Due to debt waiver for small and marginal farmers up to Rs 2 lakh, farmers in the state of Punjab have stopped making repayment of their crop loans and the recovery scenario is being adversely affected,” according to the State Level Bankers Committee report which was released on Wednesday.
Notably, under the scheme relief, up to Rs 2 lakh would be provided to marginal and small farmers who have crop loans from cooperative institutions, public sector banks, and other commercial banks as on March 31, 2017.
A bank official said that several farmers were reluctant in repaying their crop loans and it has become one of the reasons in the rise in NPA level under the farm sector.
As per the SLBC report, the NPA under the agriculture sector was to the tune of Rs 8,952 crore as on September 30, 2018, as against Rs 633 crore in corresponding period of last year.
The NPA amount of Rs 8,952 crore was 11.20 per cent of outstanding agriculture advances as against 7.19 per cent in the corresponding period of last year.
The NPA level as a percentage of total advances also rose from 2.60 per cent in September 2017 to 3.47 per cent in 2018.
The total outstanding agriculture advances in Punjab were to the tune of Rs 79,963 crore as on September 30, 2018, as against Rs 88,122 crore in corresponding period of last year.