Farmers want agricultural loan to be delinked from CIBIL score

Pressing for their long-standing demand to unlink the CIBIL score for agricultural loan extension, farmers will besiege the office of the Reserve Bank of India in Bangalore on Tuesday.

Kurubur Shanthakumar, chairman of the Karnataka Sugar Cane Growers Association, told media here on Saturday that farmers are struggling to get institutional credit from the government as bank officials ask for their CIBIL score before approve a loan.

As a result, the majority of farmers cannot benefit from institutional credit and end up in the clutches of private lenders paying exorbitant interest rates, he added.

Mr Shantakumar said farmers are sometimes unable to repay their principal and interest due to drought, floods or loss of crops from other causes. Therefore, they may end up missing some installments in loan repayment, but this is held against the farmers and reflected in the CIBIL score which has a direct bearing on obtaining institutional loans, he added.

Although farmers grow crops to ensure the nation’s food security, agricultural lending policies are heavily loaded against them and therefore the government should put in place a policy to decouple agricultural lending from the CIBIL score.

Mr Shanthakumar said that although farmers have repaid interest on loans from the previous 12 months despite losses due to vagaries of nature and the pandemic, banks are insisting on full repayment of the principal amount before they are eligible. to new loans. This prevented farmers from resuming agricultural activities during the current season.

The insistence of banks to repay the full amount of the loan before being eligible for new loans has created a new crisis for farmers and therefore the government should step in and announce a policy change, Mr Shanthakumar said. .

The Association also demanded that the new agricultural loan policy take into account the market value of land owned by farmers and release the loan accordingly. This should be similar to a home loan or car loan since the amount of the loan is equivalent to the mortgaged value of the property, specifies the Association.

Farmers claimed that despite government announcements, farmers have not benefited from any of the policies put in place during the pandemic, although processors have secured loans far beyond their ability to repay.

In addition, farmers were not only receiving notices from banks, but lawsuits were being filed against them, which amounted to harassing the farming community, Mr Shanthakumar said.

Noting that the state-level bankers’ meeting on agricultural loan issues was making decisions based on comments given by officials who have no knowledge of agricultural issues, Mr. Shanthakumar said that the farmers’ representatives should also be invited to the meeting so that they could present a correct picture of the situation on the ground.

He said that although many letters were written to the RBI, there was no response forcing the farmers to besiege his office in Bengaluru.

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