In the field of agriculture finance, default is the most common occurrence. Default involves a great deal of learning for it. Each default tells its own story. There are numerous factors that influence defaults. Many factors have reasons that are primarily driven by lenders. The default may be genuine or intentional, but understanding its full composition is fascinating. From the lender's perspective, it's critical to understand some of the factors that have a dual impact on timely recovery. The success of agriculture finance is largely attributed to the underwriter's knowledge of the sector and its practical implications. Unlike other advances, where income and repayment are controlled factors in the borrower's hands, agro-climatic factors and other local influences drive repayment culture in agriculture advances.
The lender's overall dealings with the farmer while on boarding him as a borrower have a significant impact on default. Credit risk management is complicated by lenders' lack of sectoral knowledge; as a result, rural bankers who are involved in this industry will find this article useful. Let's delve deeply into a few of the aspects that I believe may be beneficial to the rural banking community in KCC while managing defaults.
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Rajesh Kharche
Rajesh Kharche is a postgraduate in agriculture and an agri-banker with over two decades of experience in public and private sector banks. He worked in many part of the country, from branch to region to state to zone. He is conscientious about all aspects of agriculture and rural finance. His responsibilities include Agri-finance from start to finish, including business development, underwriting, product, policy, strategy, collection, and risk management, among other things.
His previous book "Bankers' Hand Book on Kisan Credit Cards." contains information that is not available in the banking sphere but is useful in day-to-day Agri-banking. This technical knowledge of agriculture is beneficial to the entire rural banking fraternity in driving profitable agriculture finance. His practical field experience, along with agricultural education and financial management, ushered in new areas of farm finance. Before joining ICICI Bank, he worked for Union Bank of India, Axis Bank, and Kotak Mahindra Bank in agriculture and rural banking division.
