Farmers want farm loan delinked from CIBIL score 


Pressing for their long-pending demand to delink CIBIL score for extending agricultural loan, farmers will lay siege to the Reserve Bank of India office in Bengaluru on Tuesday.

Kurubur Shanthakumar, president, Karnataka Sugarcane Cultivators Association, told media persons here on Saturday that farmers are facing difficulties in availing institutional credit from the government as bank officials seek their CIBIL score before approving a loan.

As a result a majority of the farmers are unable to avail institutional credit and end up in the clutches of private money lenders paying exorbitant rate of interest, he added.

Mr. Shantakumar said farmers at times are unable to repay their principle and interest either due to drought, floods or crop loss because of other causes. Hence they may end up missing a few instalments in loan repayment but that is held against the farmers and is reflected in the CIBIL score which has a direct bearing on securing institutional loans, he added.

Though farmers cultivate crops to enable food security to the nation, the farm loan policies are heavily loaded against them and hence the government should bring in a policy to delink agricultural loan from the CIBIL score.

Mr. Shanthakumar said though farmers have repaid the interest on loan of the previous 12 months despite suffering losses due to vagaries of nature and the pandemic, the banks are insisting on full repayment of principal amount before being eligible for fresh loans. This was preventing farmers from taking up agricultural activities in the current season.

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

The Association also demanded the new farm loan policy to take cognition of the market value of land owned by the farmers and release loan accordingly. This should be similar to the housing loan or vehicle loan as the loan amount is equivalent to the mortgaged value of the property, said the Association.

The farmers alleged that despite announcements by the governments the farmers have not benefitted from any of the policies which were rolled out during the pandemic though industrialists were securing loans far beyond their capacity to repay.

Besides, the farmers were not only receiving notices from the banks but cases were being registered against them which amounted to harassing the agricultural community, said Mr. Shanthakumar.

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

He said though many letters were written to the RBI, there has been no response forcing the farmers lay siege to its office in Bengaluru.

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Printable version | Aug 18, 2022 4:04:14 am | https://www.thehindu.com/news/national/karnataka/farmers-want-farm-loan-delinked-from-cibil-score/article65564153.ece