Following protests, the Tamil Nadu government issued a clarification on June 9 that only farmers’ Credit Information Bureau India Limited (CIBIL) statements would be checked before issuing agricultural loans from cooperative banks under the Kisan Credit Card (KCC) scheme. It was previously believed that farmers’ CIBIL scores would be scrutinised before the sanctioning of loans, leading to protests.
Reacting to the protests, the state government reportedly said that only CIBIL statements would be checked to ensure that no loans had been issued from other banks under the KCC scheme to the same applicant. According to an official who spoke to TNIE, the guidelines for issuing loans under the KCC scheme state that the maximum loan eligibility is Rs 3 lakh. In order to maintain this ceiling, cooperative banks are required to verify if the applicant has loans from other banks.
Previously, a May 26 directive from the Registrar of Co-operative Societies (RCS) allegedly said that CIBIL scores would be used to determine eligibility of loans issued under the KCC scheme. This led to protests across the state. The Tamil Nadu Farmers’ Protection Association called on Chief Minister MK Stalin to repeal the directive. The Association pointed out that farmers may sometimes be forced to default on loans due to natural causes such as crop failure, reports say. Penalising farmers for factors beyond their control defeats the purpose of co-operative banks, they reportedly added.
Further, an earlier report by DT Next said that the guidelines require all co-operative societies and central co-operative banks to issue loans only through
Kisan Credit Card - Digital Rural Market (KCC-DRM) accounts. The guidelines also require self-declaration forms, property liability records, and proof of livestock ownership, along with an attested photograph of the farmer with their livestock, the report further said.
Meanwhile, the Tamil Nadu Farmers’ Protection Association told The Hindu that while the Tamil Nadu government’s own estimates for the cost of paddy cultivation is Rs 76,000 per acre, only Rs 36,000 is offered as crop loans. This forces farmers to approach local moneylenders and middlemen.
Farmers also pointed out how the Maharashtra government had, on May 19, warned banks not to ask for farmers’ CIBIL score while issuing loans
