‘Loans being sanctioned without disclosing interest rate’

The Karnataka Prantha Raitha Sangha (KPRS) has taken exception to what it described as whimsical interest rates being charged on loans taken by farmers from various nationalised banks as well as the Primary Land Development Bank despite being aware that farmers are in a financial crisis owing to drought and crop failure for two consecutive years.

M.S.K. Shastry, president of the KPRS, told mediapersons here on Saturday that while sanctioning loans, various banks were collecting about 70 signatures on the loan applications without disclosing the exact rate of interest.

The banks were not informing the applicants that their property was being attached. Farmers were made to submit several signed blank cheques. Whenever farmers failed to repay two or three instalments, the banks threatened them with legal action.

Farmers were being told that criminal cases would be filed against them, Mr. Shastry alleged.

Many farmers in the district had committed suicide because of the harassment by banks. Farmers considered it an insult if their tractor or other material was seized by bank personnel and, therefore, many of them were taking the extreme step, he claimed.

Banks should stop collecting blank cheques from farmers while sanctioning loans and they should inform them of the exact rate of interest, Mr. Shastry said.

He said that he would write to the Prime Minister and the Union Finance Minister about these facts with a request to instruct the banks not to harass farmers and give them more time to repay loans, especially when they were in a crisis.

  • Farmers are being made to submit several signed blank cheques: sangha

  • ‘The matter will be brought to the notice of

    the Prime Minister, Union Finance Minister’