Agricultural and Non-Agricultural Loan Recovery Performance of District Central Co-operative Banks in Maharashtra

Abstract

Co-operative banks in India have primarily been established with the intention of providing agricultural and non-agricultural credit to the farmers, small artisans and other people particularly in rural area. There are various co-operative credit institutions in India. Of them, District Central Co-operative Banks (DCCBs) in Maharashtra have been chosen in order to study their agricultural and non-agricultural loan recovery performance. There have been number of studies of the subject carried out by various researchers as on today. Some of them have been reviewed from the point of view of the present study. The study is based on secondary data for the period of ten years from 2001-02 to 2010-11. From the study, it is revealed that the DCCBs in Maharashtra have achieved increasing trend in all the indicators selected for the study except number of branches. There is also a matter of concern that outstanding loans and over dues of the banks in the state have increased over the period. It is also found that average recovery percent of non-agricultural loan is higher than the agricultural loan recovery in case of both short term and medium term loans. The study suggests that DCCBs should lay emphasis on recovery of agricultural loan. While distributing loans, viability of each case of loan application should be properly inspected and finalized. In addition, wilful and non-wilful defaults should also be identified.