Post debt-waiver,farmers reluctant to go for fresh loans

Banks in the agrarian states of Punjab and Haryana have disbursed fresh loans to less than 20 per cent of farmers who had applied for waiver and relief. In Haryana,the figure is 19 per cent of the total 5.2 lakh farmers who had claimed relief,while it is only 16 per cent in Punjab. In this state,3.5 lakh farmers have benefited from the waiver scheme.

While public sector banks,regional rural banks (RRBs) and cooperative banks have together provided fresh credit to 1.10 lakh beneficiaries out of the total 5.2 lakh in Haryana,private sector banks have not given out fresh loans to any of the 950 eligible farmers,the State-Level Bankers Committee (SLBC) meet observed on Tuesday.

In Punjab too,fresh credit has been issued to just 55,243 account-holders out of the 3.5 lakh.

Private sector banks in the state have so far issued fresh loans to just one of the 1,524 farmers who benefited from the scheme; cooperative banks have done so to 13 per cent of accounts with them. Out of the Rs 1,041.10 crore claims that crystallised under the debt waiver in Punjab,only Rs 308.18 crore have been issued as fresh loans.

Banks are now trying to find out why eligible farmers are not going for fresh credit. An official at the Punjab National Bank,the convenor bank of SLBC,said: “Farmers are possibly going to banks other than the one in which their account has been settled. Farmers could also be approaching moneylenders for fresh credit as it is hassle-free.”

While explaining their slow performance in providing fresh loans during the Punjab SLBC meet held last month,cooperative banks had said most farmers under the scheme were chronic defaulters and had stopped making transactions with primary agricultural credit societies. They might have shifted to other institutions for availing fresh credit,cooperative banks observed.

‘Progressive’ Haryana still has too few banks
For a state that is marching ahead on almost all development indices,Haryana still lags behind in density of banks and financial inclusion. Against an all-India average of one branch per 15,000 people,five districts of the state — Fatehabad,Jind,Kaithal,Narnaul and Jhajjar —have been identified as under-banked in the 2001 census of the Reserve Bank of India (RBI). The Haryana State Level Bankers’ Committee (SLBC) has said only Jind and Narnaul can be still considered under-banked as their coverage of population per branch is higher than 15,000. The backward district of Mewat — created after 2001 — may also be under-banked. In neighbouring Punjab,the only under-banked district,Mansa,has achieved the national average.