ROLE OF BANKING SECTOR IN DEVELOPMENT OF INDIAN AGRICULTURE-WITH SPECIAL REFERENCE TO SATNA DISTRICT

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1 ROLE OF BANKING SECTOR IN DEVELOPMENT OF INDIAN AGRICULTURE-WITH SPECIAL REFERENCE TO SATNA DISTRICT Dr.Dhirendra Ojha, Asst. Professor (Commerce) AKS University, Satna (M.P.) ABSTRACT India is basically an agriculture based country and the people of India still derive a lot up on agriculture productivity for their livelihood. The main purpose of this research paper was to bring into light about the importance of banking sector specially the importance of regional rural banks which play an important role in providing agriculture credit and to remove them from the clutches of local moneylenders. Keywords: Banking, Sahukars, DCCB, Commercial Banks, Kisan Credit Card, Jila Sehkari Bank. Introduction: Banking Facilities: Banks are considered as the backbone of modern banking business. Banks play an important role in the development of Indian economy. Banks had played an important role in bringing agricultural revolution, in removing indifference of wealth, and in the development of cottage industries. Before the development of modern banking facilities the condition of Indian agriculture was very terrible. Indian farmers were severely exploited by money- lenders, and Sahukars but due to the improvement in modern banking facilities the condition of Indian farmers had improved up to a lot extent. Banks had provided tremendous facilities to the farmers in India. Banks played an important role in the development of Satna district. At present there are thirty-seven Central co Cooperative banks in Satna district and the number of offices including head office was 846. Methodology: This research paper is exploratory and is based on the secondary data which is collected from the annual reports of Jila Sehkari Bank and District Credit Cooperative Bank in Satna District. Commercial Banks: - There are 22 Commercial Banks in Satna district. Main of them are State Bank of India, Canara Bank, Union Bank of India, Syndicate Bank, Axis Bank, ICICI Bank, IDBI Bank, Punjab National Bank, Punjab and Sindh Bank, Oriental Bank of Commerce, Allahabad Bank etc. Therefore there are many Commercial Banks and Nationalized banks which are playing an important role in the progress of Satna district and the farmers of Satna district by providing them loans at very reasonable rates. Banks also play an important in the progress of the people of Satna district and the people of Satna district by providing them employment opportunities. Small and marginal farmers are also benefited by getting loans at reasonable rates due to which they are able to do advanced agriculture. State Bank of India: State Bank of India also provides agriculture loans for various activities like crop rotation, horticulture, plantation crops, digging of wells, tube wells and irrigation projects, construction of cold storages and godowns processing of agriculture products, allied activities like dairy

2 fisheries, poultry, loans against pledge of ware house receipts, loans against produced stored by the farmer at his own premises, rearing of silk worms, etc. Impact of such loans: a. Agriculture marketing: State Bank of India provides loans for the purpose of agriculture marketing due to which the farmers can sell their produce at higher cost. By the means of agriculture marketing a farmer can create demand for his product and can sell his product at the place where they get more price. b. Purchase of equipments : State Bank of India also provides loans for the purchase of agricultural equipments like providing loans for the purchase of tractors, harvesters etc. which help in increasing the agriculture productivity and there by helps in increasing standard of living and social status of farmers. c. Loans for livestock: State Bank of India also provides loans for the purchase of livestock for example: cow, ox, etc. which also helps in increasing the dairy products as well. d. Loans for irrigation purpose: State Bank of India also provides loans for the purpose of irrigation due to which productivity of agriculture is increased and dependence of farmers upon monsoon is reduced. e. Lower Interest Rates: State Bank of India also cut down its rate of interest on agriculture loans that is 10% on an amount of 3 lakh to 25 lakh on crop loans from the existing to 12.75% floating rate. Also upon irrigation schemes bank lad reduced interest rates up to 8 to 9% on an amount of 25 lakhs from to 13.25%. Following are some of the schemes of State Bank of India: - 1. Agricultural Gold Loans. 2. Kisan Credit Card. 3. Kisan Gold Card Scheme. 4. Dairy Plus Scheme. 5. Scheme for financing seed processors. (5) Lower Interest Rates:- State Bank of India had also cut down its rate of interst on agriculture loan that is 10 percent on an amount of 3 lakh to 25 lakh on crop loans from the existing to percent. Floating rate. Also upon irrigation schemes bank had reduced interest rates upto 8 to 9 percent on an amount of 25 lakhs from to percent. District Central Cooperative Banks (DCCB);- There are about 37 district central cooperative banks upto year 2014 and the number the total number of member ship was The total paid up capital of such banks was crore Rs. out of which govt. share was 4580 crore Rs. The total reserves of such banks was crore Rs. out of which statutory reserve was 4117 crore Rs. Total loans granted by such banks upto year 2014 was crore Rs. Impact of District Central Cooperative Bank:-Due to this bank the small and the marginal farmers who did not have any mortgage to keep can take up the loan easily. This bank was meant up for the farmers to raise up their social status and standard of living. Where commercial banks and private banks hesitate in providing loans to the farmers district central cooperative bank easily satisfy need of such farmers. Land Development Bank:-This bank was primarily meant to provide loans for the development of infertile and waste land in order to improve productivity.

3 Impact:- (1) Increase in Productivity: - Due to land development banks the productivity increased because the waste and infertile land which was previously not used for the purpose of cultivation can now be use which increases productivity. (2) Increases Innovation:-For doing productivity on waste and infertile land innovation is necessary for which capital is required in huge quantity which the poor farmers of the district not had. This problem was solved by the existence of land development banks which provided them loans for the purpose of new research due to which productivity increased because the waste and infertile land which was previously not used for the purpose of cultivation is now used. (3) Increases Standard of Living:-Due to the development of land in the district and increase in productivity the waste and infertile land was also used for production purpose which increases standard of living of the farmers in the district. MEASUREMENT AND EVALUATION OF DIFFERENT FINANCIAL INSTITUTIONS:- long term loans to the farmers for the purchase of tractors, tube-wells, wells, electric and diesel pumps, thres hers etc. The main purpose of this bank was development of agricultural production in the rural areas by the adoption of new means of agriculture in the district. With a view to facilitate the members farmers Credit Card Scheme was introduced in 15 districts which is now extended to all over the state through our district central cooperative Banks and Primary Agricultural credit Societies. The year wise progress in distribution of Kisan Credit Cards is as under:- Table 1Distribution of Kisan Credit Cards No. farmers Jila Sehkari Krishi Aur Gramin Vikas Bank, Maryadit, Satna: This bank was established for the Source: - Sehkari bank.htm. development of agriculture which provides Loan Disbursement by Jila Sehkari Krishi Aur Gramin Vikas Bank, Maryadit, Satna S.No. Name of Plan No. of farmers of Increase in no Percentage Inc Amount (in Lakh) No. of farmers Amount 1 Minor Irrigation Tractor Thresher

4 4 Dairy Farm Pisciculture Poultry farm Motor Cycle Road Transport Rural Housing Furniture/Carpentry Utensils Industry Oil Mills Rice Mills Flour Mills Dhaba Total Source :- Annual Report District Central Cooperative Bank Satna. Measurement and Evaluation of different financial institutions upon Agriculture:-If we measure and evaluate the impact of different financial institutions upon agriculture then following conclusion are derived :- (1) Small and marginal farmers do not get loan facilities:-there is lack of loan facilities for the small and marginal farmers because they do not have enough security to keep as mortgage Also the farmers in the district are illiterate who are unable to understand the complex formalities of banking sector. (2) Higher Rate of Interest:-Although the rate of interest is reduced by many financial institutions providing credit yet if we compare it from the interest rates to other sectors we find that the rate of interest in uncertainty based agriculture is very high. (3) No Loans for unproductive Purposes:-The financial institutions which are meant for the purpose of agriculture generally do not provide loans for unproductive purposes such as birth, death, marriages etc. due to which the farmers feel less interested in going to such banks and even for their productive purpose they prefer to go to money lenders (4) Loans to other sectors:-the banks which are primarily meant for the development of agriculture also provides loans to other sectors whereas the financial institutions of other sector do not provide loan for agriculture purpose. (5) Heavy formalities: - The formalities in these banks are also very much due to which the poor and illiterate farmers of the district hesitate in going to banks and they prefer to go to the local money lenders where there are less formalities.

5 (6) Not located in rural areas: - As we know that the majority of the population doing agriculture resides in rural areas and the banks providing loans for agriculture purpose should also be in the rural areas. But this is not the condition. The banks which are for the purpose of providing loans for agriculture are in the urban areas due to which the farmers are in the urban areas due to which the farmers hesitate in taking loans from these banks. Conclusion: - As an evaluation we can see that the financial institutions providing loans for the purpose of agriculture turned out to be total failure. Although there is a slight improvement in the condition of workers but the overall position is that the financial institutions do not serve the purpose of agriculture. Therefore the agriculture sector is lagging behind and due to it the economic growth of the country is also back ward since Indian economy is an agriculture economy and if the condition of agriculture economy will not improve it will definitely affect the Indian Economy and its growth. References: [1] Dr.V.C.Sinha: Economic development and planning in India. [2] Ghosh Alag:Indian Economy. [3] Annual Reports of DCCB. [4] Annual reports of Jila Sehkari Kendriya Bank. [5] Sainath P.: The Indian Economy. [6] Singh C.N.: Agriculture Economics and Agriculture Problems. [7] [8] Rath Jayadev : Regional Rural Banks and development of agriculture in India, 1996 [9] Suresh C. Sinha and Anil K. Dhiman : Research Methodology