With proprietors abroad, farmers stuck in loan limbo opt for money lenders

An internal inspection earlier this year had revealed some discrepancies in the sanction and repayment of loans, following which NABARD and RBI had directed all banks to follow the procedures without any lapses.

Written by Aishwarya Mohanty | Anand | Published: August 12, 2018 9:01:33 am
Bihar, Bihar diseal subsidy, Bihar farmers, Nitish Kumar, India news, Indian Express news Officials say loans will be sanctioned when the documents are produced. (File)

Nirav Patel, a 46-year-old farmer from Raas village in Anand district’s Borsad taluka, has been forced to take a Rs 1,25,000-loan at 3 per cent interest rate even after the state government announced zero per cent interest loans for farmers in the state last year.

The reason: Patel is expected to get signed affidavits in acceptance of the loan from 16 proprietors of his farm, of whom one is dead and five are settled in the UK.

This is in accordance with a directive by National Bank for Agriculture & Rural Development (NABARD) and the Reserve bank of India (RBI) where in all Cooperative banks, Regional Rural banks and Public Sector Commercial banks can sanction loans to farmers under the Kisan Credit Card (KCC) scheme only when all proprietors of a particular farm land, as mentioned in the revenue records, agree and undersign to take the loan.

According to bank officials, an internal inspection earlier this year had revealed some discrepancies in the sanction and repayment of loans, following which NABARD and RBI had directed all banks to follow the procedures without any lapses.

Meanwhile, Chief Minister Vijay Rupani reduced the interest rate on farm loans from 1 per cent to 0 per cent in October last year and raised the maximum loan limit to Rs 3 lakh for the farmers of the state.  “I had applied for a loan in June this year. Now its August and the loan has still not been sanctioned. Five co-owners of the land are settled in London. The ownership of the land is such that if one person dies, his/her immediate family becomes the joint owner of the land. In this way, today there are as many as 17 owners of the land, including me, while I am the only one living here and taking care of the land. Yet I have to produce affidavits of each of the owners listed under the revenue records to get a loan sanctioned,” said Nirav Patel.

After two months of repeated visits to the bank that went in vain, Patel has taken the loan from a money lender at a 3 per cent interest rate. Like Nirav, many other farmers from various villages in Borsad taluka approached the bank multiple times seeking loans but had to give up.

Farmers in these villages, who mostly grow rice, apply for loans in the month of June-July for sowing new crops.
Most of these farmers have now turned to money lenders or friends to get their loans.

Kiran Patel, sarpanch of Raas village and the chairman of Kisan Seva Sarkari Mandali that represents farmers from a cluster of 10 villages in Borsad, said, “Borsad taluka has 66 villages. In these, as many as 30 villages are dominated by the Patel community. In most households in these villages, at least one family member is settled abroad either in Africa, UK or the US. From my family itself, we have seven members settled in Africa.”

Talking to The Indian Express, director of Kheda District Central Co-operative Bank (KDCC bank) in Anand, Tejas Patel said, “This step was taken because when the farmers failed to repay the loans, the case was taken to court which would send notices to all proprietors. Most of them would respond that they are unaware of the loan. Under such circumstances, the bank tends to lose money.” He said that loans will be sanctioned when the documents are produced.

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