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Milk coops say banks reluctant to issue cards for dairy, fisheries sectors: SLBC

While only 2.3 per cent of the KCC loan applications for animal husbandry have been sanctioned, a dismal 0.9 per cent of the applications by fishermen have so far received loan approvals from banks, according to a quarterly report by the SLBC published last week.

Written by Avinash Nair | Ahmedabad |
Updated: December 28, 2021 3:05:37 am
“There has been repeated escalation by milk marketing federations about banks not processing KCC animal husbandry applications,” the report stated. (Representational Image)

Milk cooperative unions in Gujarat have raised complaints about banks being reluctant to sanction Kisan Credit Cards (KCC), exclusively meant for animal husbandry, dairy and fisheries sectors, according to a latest report by the State Level Bankers’ Committee (SLBC), Gujarat.

While only 2.3 per cent of the KCC loan applications for animal husbandry have been sanctioned in Gujarat, a dismal 0.9 per cent of the applications by fishermen have so far received loan approvals from banks.

The percentage of rejected applications are also higher than the sanctioned applications, states the report while mentioning about the expanded scheme that provides collateral-free loans up to Rs 1.6 lakh.

Explaining the situation, MM Bansal, convener of SLBC Gujarat and General Manager Bank of Baroda, said, “It is not that banks are reluctant. There are a couple of issues that is causing delay in sanctioning loans under KCC. The District Central Cooperative Banks have around 70 per cent account of milk farmers. For financing under KCC, the applicant must be a member of primary agriculture cooperative society or PACS. It takes time to process. In the coming weeks, the sanctioning ratio will go up.”

About the high numbers of rejections in applicants from animal husbandry and fisheries sectors, Bansal said there are some teething issues where applications are not even filled properly.

The SLBC report published last week stated, “There has been repeated escalations by milk marketing federations about banks not processing KCC animal husbandry applications.”

The report further states, “SLBC is also in the receipt of numerous representations from lead district managers about reluctance of DCCBs (District Central Cooperative Banks) in accepting and processing KCC Animal Husbandry applications.”

The SLBC report shows that as on December 12, 2021, only 2.3 per cent of the total KCC animal husbandry applications have been sanctioned by the banks, while the sanctions for the fisheries sector is less than one per cent.

Of the 75,297 applications received for KCC animal husbandry in Gujarat, 1,752 applications (2.3%) were sanctioned, while 8,229 (11%) were rejected. The performance for KCC fisheries is even dismal. Of the 4,197 applications received by the banks, only 38 were sanctioned (0.9%), while 104 applications (2.5%), were rejected.

“As advised by the department of financial services, Ministry of Finance, in the new SoP for saturation drive, all the member banks are also requested to issue directions to their branches to dispose of the KCC applications within 15 days,” the SLBC report added.

Asking the Gujarat government, NABARD (National Bank for Agriculture and Rural Development) and GSCB (Gujarat State Cooperative Bank) to issue suitable directions to DCCBs in this regard, the report said cooperative banks have sizeable accounts of beneficiaries being credited for deposit of sale proceeds of milk by district milk unions.

The SLBC Gujarat statement comes a month after the Union Finance Ministry asked the banks to issue “stand-alone seperate KCC” exclusively for animal husbandry, dairying and fisheries and issued detailed guidelines for issuing Kisan Credit Cards where beneficiaries will have access to collateral-free loans.

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