Shun moneylenders, Chidambaram tells farmers

SRIRANGAPATNA, AUG. 14. The Union Minister for Finance, P. Chidambaram, today appealed to farmers to shun moneylenders and begin patronising banks for loans. Interacting with bank officials and farmers here as part of his visit to the district, Mr. Chidambaram cautioned farmers to stay away from moneylenders who charged an exorbitant rate of interest, leading to a debt trap. In contrast, the Finance Minister said, banks not only charged a lower rate of interest, but also offered convenient repayment schemes.

He appealed to banks to help the Union Government achieve its target of extending Rs. 1,05,000 crores in loans to the farm sector by becoming more liberal in sanctioning loans to farmers in distress.

Mr. Chidambaram tried to impress upon the bank officials to see the farm sector as a profitable industry, which had the potential of a high recovery percentage.

He noted with concern that as many as 60 per cent of the farmers continued to approach moneylenders, who charged a rate of interest that was as high as 36 per cent a year.

It may be mentioned here that Mandya district witnessed a series of suicides by farmers during the past three years of drought.

Mr. Chidambaram tried to get feedback directly from the farmers by questioning them on the problems they faced in securing loans from banks.

A few farmers brought to the notice of the Minister that the banks insisted on security, which they could not provide.

As part of the new measures taken by the United Progressive Alliance (UPA) Government, Mr. Chidambaram said the crop loan for farmers had been increased from a maximum of Rs. 14,000 for every acre to Rs. 16,500.

Farmers had even been extended a one-time settlement (OTS) scheme, which facilitated repayment at a lower rate of interest.

He urged banks not to deny loans to farmers who suffered crop loss because of natural calamities and had not wilfully defaulted on loan repayment.

On education loan, Mr. Chidambaram said banks had been directed to provide education loans up to Rs. 7.5 lakhs without security.

Till now, the maximum amount of education loan available without security was Rs. 4 lakhs. He urged banks to provide need-based loans to members of self-help groups.

Mr. Chidambaram interacted with farmers and bank officials at the Primary Cooperative Agricultural and Rural Developmentank and Karnataka Bank Ltd. here.

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