Karaikudi: Government-owned banks have a target to disburse agriculturale loan to the tune of 600,000 crore during the current fiscal - 25,000 crore higher than what was set earlier - said Union Finance Minister P.Chidambaram.

Inaugurating a new Rural Training Centre (RTC) jointly set up by Indian Bank, Indian Overseas Bank (IOB) and National Bank for Agriculture and Rural Development (NABARD) here, Chidambaram said: "In 2011-12, the agriculture loan target was 450,000 crore but the achievement was 475,000 crore. In 2012-13, the target was 575,000 crore."

Karaikudi in Tamil Nadu is around 420 km from state capital Chennai.

Referring to the meeting he had with the chairmen of public sector banks, Chidambaram said the bankers told him that the agricultural loan disbursement will be 600,000 crore this fiscal.

He said the interest rate on farm loan would come down to four percent to farmers who pay their dues on time.

Chidambaram urged the farmers to look at non-farming activities to increase their income levels as they cannot depend on agriculture for their earnings throughout the year owing to uncertain rains.

IOB chairman and managing director M. Narendra said the government banks have decided to increase their lending to agriculture sector in Tamil Nadu by around 41 percent to 51,000 crore.

According to Narendra, of the total disbursements, nearly 60 percent will go for crop loans while the banks would also focus on investment credit.

He said public sector banks would disburse over 2,000 crore in Chidambaram's own Sivaganga constituency.

Narendra said Sivaganga has 184 bank branches.

Last fiscal, banks disbursed 1,284 crore loan as against a target of around 1,125 crore and for the current fiscal the target is around 2,065 crore.