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Farmers default on tractor loans expecting waiver from government

R. Arivanantham
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Beneficiaries urged to change their mindset and repay loans

Stern action:Seized tractors parked in a private parking space opposite the New Bus Stand in Krishnagiri. -Photo: N. Bashkaran
Stern action:Seized tractors parked in a private parking space opposite the New Bus Stand in Krishnagiri. -Photo: N. Bashkaran

Over 90 per cent of the farmers who had availed themselves of loans for purchasing tractors and tillers were wilful defaulters, said N. Arumugam, Chief Manager, State Bank of India main branch in Krishnagiri on Saturday.

Mr. Arumugam told The Hindu that the main reason for the default was that many farmers who took loans were expecting loan waiver from the government.

Farmers should change this kind of mindset; the banks are extending a helping hand to the farmers to improve the agriculture produce and also their standard of living.

They should also understand that only public money was disbursed as loan to the farmers on priority basis.

Hence, they should understand the intension of the bankers that the field level officials are constantly in touch with the loan defaulters with humane touch and not to recover the loan dues by using unlawful method.

The field-level officials are kind enough to approach the defaulters, explaining the consequences if they continue the tendency of not to repay the loan even after office hours.

The SBI main branch in Krishnagiri had extended 130 loans for buying tractors and 12 loans for purchasing tillers.

Of the total of 130 tractor loans, 34 tractors from wilful defaulters were seized by the bank and kept in private parking spaces in various places in the district.

After all the efforts to recover the dues failed, the SBI announced the auction of six tractors on March 7 after giving publicity in newspapers and also personally informing the defaulters in advance.

Since, the four defaulters have paid a part of the overdue amount, the tractor auction was withdrawn and the same was released to the farmers after getting commitment letter from them to repay the rest of the amount within a stipulated time frame.

Only two tractors were sold through auction, as they borrowers continue to be the wilful defaulters and also expressed their desire to face legal proceedings against them.

The bank is extending tractor loan at an interest rate of 16.5 per cent to the farmers with margin money of 10 per cent.

Loans were extended to the farmers living in 45 km radius from the bank. As the default rate is mounting, the bank has stopped lending for purchasing tractors from September 2009.

Due to this, the sales of tractors also came down, said S. Nagaraj, Field Officer, SBI.

Mr. Arumugam said that it is imminent to conduct an awareness meeting for the farmers on how to repay the tractor loan promptly to the banks, which will help them to extend fresh loans in consultation with the district administration and farmers' associations.

Such awareness meeting could be convened in Hosur and Krishnagiri towns. If need arises, such meetings would also be conducted in other parts of the district, Mr. Arumugam added.

K.M. Ramagoundar, General Secretary, Tamizhaga Vivasayigal Sangam told The Hindu that the main reason for the default is that many farmers are getting inadequate income from cultivation of crops.

Those who are diversifying in other fields such as transporting blue metal and river sand could earn some amount and repay the loan.

However, the Vivasayigal Sangam is ready to join with the bankers to educate the farmers for prompt re-payment of loans taken for purchasing tractors.

Over 250 tractors were seized by the bankers for loan default in different banks across the district. The vehicles were parked in four to five places.


  • ‘Only public money is disbursed as loan to farmers on priority basis'

  • ‘Banks extending help to farmers to improve standard of living'


  • Field level officials of the bank are constantly in touch with the loan defaulters

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