Farmers demand change in CIBIL-driven farm loan system – The New Indian Express
ONGOLE: Several farmers in the district, especially those who used bank loans during the last farming season and defaulted due to the poor financial situation, are struggling to access bank loans this year. As they did not repay their loans, their Credit Information Bureau India Ltd (CIBIL) record was compromised and the banks reportedly turned their heads away.
“I had taken out a 1 lakh bank loan two years ago and after paying a few installments, I was declared in default because I was no longer paying the installments due to my financial situation. Now that the growing season has begun, we are in dire need of capital. But our bank officials said that due to my poor CIBIL score, I am not eligible to take out new loans this time around. All this while I don’t know what a CIBIL score is and how can I get a better score, ”Puli Subba Rao, a farmer belonging to Santhanootalapadu mandal, told TNIE on Sunday.
Unlike in previous years, bankers are strictly enforcing the CIBIL clause in accordance with Reserve Bank of India (RBI) guidelines while providing new loans to farmers this year. The farmers, who have no technical knowledge of the bank, are therefore helpless.
The leaders of various farmers’ associations oppose the strict implementation of this new system. District Farmers’ Association General Secretary Duggineni Gopinath said: “If bankers really stick to this new CIBIL score priority rule to sanction agricultural loans, no farmer will be able to get support in this way. capital for this season in the district because they are already up to the neck. losses without a minimum support price (MSP) for tobacco and groundnut crops.
According to official information, district bankers aim to disburse crop loans to the tune of 7,575 crore in the current fiscal year and so far all banks have disbursed approximately 1,535 crore in loans to 40,234 farmers across the district. In the last fiscal year, all banks in the district had provided a total of 7,128 crore in crop loans to about 5.60 lakhs of farmers, against an annual crop loan target of 6,753 crore.
In general, the CIBIL score is the benchmark for sanctioning bank loans to anyone who has already benefited from a bank loan. In accordance with RBI standards, all banks must take an individual or organization’s CIBIL score as an assessment point before a new loan is sanctioned.
Syndicate Bank MV Sudhakar District Manager (LDM) said, “All bankers follow RBI standards and therefore implement CIBIL rating system from this year. It is only effective for farmers who have already resorted to bank loans. If the government issues orders through the RBI to ignore the score and follow the pattern of previous years, so will we.