ICICI Bank farm credit to touch Rs7000 crore

Our Banking Bureau
29 December 2004

Innovative projects in agriculture should be financed by venture capital and not debt capital, said K V Kamath, MD and CEO, ICICI Bank, speaking at the conference on business opportunities in agriculture organised by CII.

Financing of agriculture projects should not be driven by regulatory obligations, as it is a profitable proposition.

"The bank is working out options of venture capital and these innovative projects should be fashioned in such a way as to convince venture capital companies," he added.

Kamath also said that lending to agricultural projects could give a reasonable return. In order to study the credit delivery system, a dedicated agro group has been set up by the bank.

"In order to reduce the costs of agriculture lending we should trim down the number of intermediaries and increase agriculture insurance products. Risks of agri lending and increased intermediation costs are pushing up the costs in this field", he added.

"Packaging the credit along with insurance products substantially decreases the risks associated with agricultural lending," said Kamath.