A panel set up by the Reserve Bank of India to examine the procedures and processes of agricultural loans has proposed waiver of service charge on loans up to Rs 50,000 in order to obviate the difficulties of small and marginal armers. Many banks levy heavy service charge for processing agricultural loans and there is no uniformity among banks in this regard, it said. “Since service charge is to be paid irrespective of whether the loan is sanctioned or not, this often acts as a deterrent for the farmers to approach the banks for loans,” the panel said, proposing that with credit limits up to Rs 50,000 no service charge in any form should be collected. For loan amounts exceeding Rs 50,000, the banks should not levy service charges (including inspection charges) exceeding 0.25 per cent of the loan limit per annum, it said. The panel, headed by CP Swarnkar, who is also chairman of Syndicate Bank, has proposed that kisan smart cards loaded with all the necessary information pertaining to their borrowings, land holdings etc should be issued. “This (cards) will make all the information pertaining to an individual borrower available at a single point and thus render the need for NDCs (no dues certificates) redundant,” the panel said. However, considering the cost implications, the group had recommended that this may be started on a pilot basis in a state/district, where the awareness level of the farmers is high. Thereafter, the scheme may be expanded depending on the experience gained. SBI and ICICI Bank have already started implementing pilot projects in selected districts wherein the business facilitators/correspondents carry a hand held device to swipe the biometric smart cards of the farmer customers and incorporate all the credit information in respect of them.It has been observed that in certain states like Kerala, there used to be a system earlier whereby all loans granted by banks/co-operatives were entered in the ration card which was considered useful by branch officials.
