Union Bank of In­dia and Pun­jab & Sind Bank have con­sid­er­able ex­po­sure to agri sec­tor and the 2 banks plan to con­sol­i­date it:

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Union Bank of In­dia serves all c at e gori e s of farm­ers. Some 1,782,319 small and mar­ginal farm­ers and 256, 974 large f arm­ers ben­e­fited by the banks of­fer­ings as of March 2018. Its agri­cul­tural loans have in­creased by 4.8% yoy to `474.43 bil­lion in the first quar­ter of the cur­rent FY.

In con­trast, Pun­jab & Sind Bank served 258,525 small, mar­ginal and large farm­ers till 31 March 2019 and its ad­vances to the sec­tor stood at `117.50 bil­lion (16.22% of Ad­justed Net Bank Credit).


Su­nil Ku­mar Ya­dav, AGM at Ru­ral & Agri­cul­tural Bank­ing Depart­ment (RABD) at the bank, says more than 63% of agri port­fo­lio is for small and mar­ginal farm­ers as of June 2019. The bank added 165,494 small and mar­ginal farm­ers and 2299 large farm­ers dur­ing the last FY. The out­stand­ing loans of small & mar­ginal farm­ers as of 31 March 2019 amount to `307.73 bil­lion and that of large farm­ers `181.98 bil­lion, adds Ya­dav.

Fa­reed Ahmed, ED at Pun­jab and Sind Bank, says: “Our yoy growth in num­ber of small, mar­ginal and large farm­ers is 9.11%, 2.5% and -5.93% re­spec­tively and growth in to­tal lend­ing to each of these cat­e­gories of farm­ers is 19.74%, 5.94% and -6.77% re­spec­tively in 2018-19. Our ad­vances to small and mar­ginal farm­ers stood at `68.25 bil­lion as on 31 March 2019.”


As far as the out­stand­ing loan amounts of farm­ers are con­cerned, crop loans top the list for Union Bank of In­dia with `309.57 bil­lion, fol­lowed by in­vest­ment credit `49.76 bil­lion, dairy­ing `9.18 bil­lion, agri in­fras­truc­ture `8.57 bil­lion and poul­try `3.79 bil­lion. The bank has also been of­fer­ing funds for ser­i­cul­ture, bee-keep­ing and fish­eries, but these are at the bot­tom of the list of agri­cul­tural ac­tiv­i­ties with the out­stand­ing loan amount be­ing `40 mil­lion, `90 mil­lion and `1.81 bil­lion re­spec­tively.

Pun­jab & Sind Bank of­fers a flex­i­ble KCC limit for mar­ginal farm­ers in the range of `10,000-50,000 based on the land hold­ing and crops grown in­clud­ing post-har­vest ware­house stor­age re­lated credit needs and other farm ex­penses, con­sump­tion needs, etc. In ad­di­tion, the bank also of­fers small term loans for pur­chase of farm equip­ment, es­tab­lish­ing mini dairy/back­yard poul­try, etc, without re­lat­ing it to the value of land. Fa­reed Ahmed says KCC RuPay cards are be­ing pro­vided to all el­i­gi­ble ac­count hold­ers. The bank also of­fers crop in­sur­ance un­der the Prad­han Mantri Fasal Bima Yo­jana (PMFBY).

Again, as part of cross-sell­ing, the bank of­fers var­i­ous credit, de­posit and mi­cro in­sur­ance prod­ucts to large farm­ers. “For ex­am­ple,” says Fa­reed Ahmed, “2032 large farm­ers have availed hous­ing loans as on 31 March 19.”


Union Bank of In­dia has taken up sev­eral dig­i­tal ini­tia­tives for reach­ing out to un­banked seg­ments and has pro­vided smart bank­ing so­lu­tions. Says Ya­dav: “Re­cently we have launched ‘Union Sam­rid­dhi Ken­dra’ project un­der the hub & spoke model to re­vamp our credit de­liv­ery mech­a­nism of ru­ral and semi-ur­ban (RUSU) branches. We have re­vamped the struc­ture at our RUSU branches through a com­plete dig­i­tized flow of loan pro­pos­als un­der RUSU model with a view to ac­cel­er­ate the credit flows to agri as well as re­tail & MSME sec­tors. For bet­ter cus­tomer ex­pe­ri­ence we are of­fer­ing near door-step ser­vices, and un­der this, we are pro­vid­ing new age dig­i­tal chan­nels such as m-PoS and AePS through ‘Union Digi-Cash Points’ and busi­ness cor­re­spon­dents.”

The bank has pres­ence on so­cial me­dia plat­forms like Twit­ter, Face­book, YouTube, etc. Its in­ter­net bank­ing fa­cil­ity, U mo­bile app, m-pass­book app and Union Selfie app are some of the key ini­tia­tives as part of the dig­i­tal In­dia move­ment.

Pun­jab & Sind Bank of­fers SMS bank­ing, USSD, IMPS, UPI, AEPS and other prod­ucts and pay­ment sys­tems to all farm­ers. It also ed­u­cates them about the ben­e­fits of these. The bank has on­line fa­cil­ity for farm­ers to ap­ply for agri­cul­ture loans, SHG loans and locker fa­cil­ity us­ing its‘Ap­ply & Track’ fea­ture. Says Fa­reed Ahmed: “We are set­ting up mer­chant in­fras­truc­ture at shops in the al­lo­cated vil­lages and we are pro­vid­ing them with PoS de­vices, BHIM Aad­haar Pay, Bharat QR, etc. We have adopted an in­di­vid­ual BC model and our BCs pro­vide ba­sic bank­ing ser­vices like ac­count open­ing, de­posit / with­drawal and fund trans­fer (in­ter-op­er­a­ble), bal­ance en­quiry & mini state­ment, GCC/KCC dis­burse­ment, FD/ RD open­ing, etc.”


The 3 states that are at the bot­tom as far as agri fi­nanc­ing of Union Bank of In­dia is con­cerned are Hi­machal Pradesh (9098 farm­ers), Ch­hat­tis­garh (8451) and Sikkim (5882). And those at the top are Ut­tar Pradesh (378,430), Ma­ha­rash­tra (151,042) and Mad­hya Pradesh (127,215).

In the case of Pun­jab & Sind Bank, the top 3 states where small, mar­ginal and large farm­ers are be­ing served are Pun­jab, Ut­tar Pradesh and Haryana, while Arunachal Pradesh, Goa and Megha­laya are at the bot­tom.


Slip­pages in agri­cul­tural loans of Union Bank of In­dia dur­ing Q1, FY 2020 have been to the tune of `8.91 bil­lion (up from `7.40 bil­lion in the last quar­ter of the last FY) and gross agri NPAs are `47.24 bil­lion. Agri sec­toral NPAs now con­sti­tute 9.96%, up from 8.16% a year ago. There had been yoy growth in gross NPAs of small, mar­ginal and large farm­ers. “Our gross NPAs of agri sec­tor in­creased from `27.74 bil­lion to `39.94 in the last FY,” con­cedes Ya­dav.

Pun­jab & Sind Bank faced sig­nif­i­cant growth in NPAs of the agri sec­tor in 201819. Fa­reed Ahmed says gross NPAs of the bank rose by 39.64% and net NPAs by 35.52% dur­ing the fi­nan­cial year.


Union Bank of In­dia has set a tar­get for in­cre­men­tal fi­nanc­ing to 35,521 new small and mar­ginal farm­ers and 21,176 large farm­ers for FY 2019-20. It has adopted a key strat­egy to achieve the above tar­get, which Ya­dav ex­plains: “We have al­lo­cated re­al­is­tic tar­get to our zones and re­gions. We un­der­take monthly re­view through video con­fer­enc­ing. More fo­cus is be­ing given on in­vest­ment credit, al­lied agri­cul­ture ac­tiv­i­ties, area spe­cific schemes, timely re­newal of KCC lim­its and find­ing new av­enues for fi­nanc­ing un­der agri­cul­ture like high-tech agri­cul­ture pro­jects, fi­nanc­ing to Farmer Pro­ducer Or­ga­ni­za­tions (FPOs) etc.”


Pun­jab & Sind Bank has been reg­u­larly con­duct­ing pro­grams for fi­nan­cial lit­er­acy of its farmer cus­tomers. It has 17 Fi­nan­cial Lit­er­acy Cen­ters (FLCs) at block level in Pun­jab and Haryana to spread fi­nan­cial lit­er­acy among peo­ple. A to­tal of 1293 camps have been or­ga­nized dur­ing the 2018-19 by FLC coun­selors, wherein 62,509 peo­ple ac­tively par­tic­i­pated and were sen­si­tized about ba­sic bank­ing ser­vices, so that they are able to avail bank­ing ser­vices ac­cord­ing to their re­quire­ments.

Fa­reed Ahmed says the bank will or­ga­nize work­shops/ con­duct we­bi­nars to ed­u­cate farm­ers about its prod­ucts as part of its strat­egy of busi­ness growth. “We will con­duct spe­cial agri credit cam­paigns to boost agri­cul­tural lend­ing dur­ing crop sea­sons. We are in the process of de­vel­op­ing new prod­ucts for hor­ti­cul­ture crops and an­i­mal hus­bandry. We are also propos­ing to di­ver­sify our present port­fo­lio un­der agri­cul­ture credit,” says Fa­reed Ahmed.

Fa­reed Ahmed re­veals that the bank is in the process of de­vel­op­ing new prod­ucts for hor­ti­cul­ture crops and an­i­mal hus­bandry

Su­nil Ku­mar Ya­dav says that the bank has re­vamped the struc­ture at its RUSU branches through a com­plete dig­i­tized flow of loan pro­pos­als

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