Staff Correspondent

Madikeri: The president of the Kodagu District Cooperative Central (KDCC) Bank, M.A. Ramesh, clarified on Saturday that Vyavasaya Seva Sahakara Sangha Niyamita (VSSSN) societies, functioning on the lines of banks, were insisting that farmers who wished to take loans must produce Form 3 as National Bank for Agriculture and Rural Development (NABARD) had instructed them to do so. Mr. Ramesh said KDCC Bank had not formulated the policy.

Mr. Ramesh informed presspersons that Deputy Speaker K.G. Bopaiah had criticised the move and had asked whether the insistence on production of Form 3 was in accordance with any Government Order or whether it was being insisted by KDCC Bank which provided funds to VSSSN for disbursing loans. The Karnataka Development Programme meeting held here on August 8, 2008 had also passed a resolution asking KDCC to instruct VSSSN not to insist on Form 3 for sanctioning loans. Irked by the move, some organisations have threatened to picket KDCC Bank on Monday.

Mr. Ramesh explained that Form 3 signed by the loan applicant would be sent to the Sub-Registrar’s office. And if the applicant had taken loans from any other financial institution, entry would be made in column number 11 of the Revenue Transfer Certificate (RTC) of the applicant. If the RTC entry made it clear that the applicant had already availed loan from some other financial institution, then he would not stand a chance to take loan from VSSSN. “It is for the security of the bank”, Mr. Ramesh said. However, he added that KDCC Bank had suggested to VSSSN to use their own discretion while entertaining farmers for loans. VSSSN could decide whether they want the farmer to produce Form 3 or not.


In 2006-07, NABARD inspection team, while checking the accounts of some VSSSN, had objected to the fact that VSSSN had not obtained RTC entries (entries of Form 3 to the RTC) from the farmers and had made it mandatory in future transactions. Mr. Ramesh said he was surprised to know that farmers were put to trouble when they were asked to produce Form 3. He said he failed to understand why Form 3 should not be obtained. Citing a few cases, he said a few VSSSN had been obtaining Form 3 from the loan applicants for many years now because there were cases in which the same person had taken loan from different banks after producing the same RTC. However, now that the RTC entry specifies the bank loan availed, such of those persons cannot avail loan from other banks.

Mr. Ramesh produced copies of documents to show that such practices prevailed in a commercial bank in Virajpet, Bagalkot DCC bank, Bijapur DCC bank, as per the NABARD stipulations.

He also stated that KDCC bank had disbursed loans to the tune of Rs. 147.69 crore in the period from April 1, 2008 to September 30, 2008. In the corresponding period last year, a sum of Rs. 135.75 crore was disbursed. Mr. Ramesh argued that if farmers had found it difficult to submit Form 3, then banks would not have sanctioned additional loans.

The vice-president, the directors and the managing director of KDCC were present.