MFIs selling farm loans to banks

Business-standard reports that private banks are buying loan portfolios from MFIs. Its a win-win kind of situation where MFI's benefit by reducing their asset size and hence increasing CAR, while banks try to meet the priority sector lending targets.

So banks are using these kind of tricks to extend 13.5 per cent of their advances as direct agricultural loans. This does not increase the credit availability for farmers so though this scheme may be good for MFIs and banks but may not be so for farmers.