Search
+

    Banks suggest easier loan rules for farmers

    Synopsis

    PSU banks may allow farmers to borrow afresh before clearing existing loans.

    Getty Images
    The fresh proposal on farm loans would help farmers de-stress and gain access to funds even during natural calamities.
    KOLKATA: Public sector banks may ask the government to allow farmers to borrow afresh even before clearing previous loans.

    This is one of the key takeaways from a branch level consultation exercise that has been going on for the past one week. Banks are collating inputs from grassroots employees, refining them and are likely to hand over the suggestions to the government in the first week of September, when Prime Minister Narendra Modi is set to hold a meeting with public sector banks.

    Banks are also seeking a more robust loan guarantee structure for Mudra loans, while they feel an umbrella cyber security framework would help, rather than each lender attempting to do it individually. “The major concern area for the government has been the falling market share of public sector banks. The exercise would also help in an image makeover for public sector banks,” said Ashok Kumar Pradhan, chief executive, United Bank of India.

    He said the fresh proposal on farm loans would help farmers de-stress and gain access to funds even during natural calamities. Currently, farmers are not permitted to avail fresh loans before clearing past dues. Farm loan stress has risen to double digits, and fresh loans under Kisan Credit Cards may be one way out, banks feel.

    As per the suggestion, farmers may get bank funds even if they are not in a position to repay earlier loans, but are able to service the loans by making interest payments, Pradhan said at the state-level inter-bank group consultation in Kolkata on Friday. A credit guarantee scheme for agri loans can also improve credit flow to the sector, said State Bank of India’s regional head Ranjan Kumar Mishra.
    (Catch all the Business News, Breaking News Events and Latest News Updates on The Economic Times.)

    Also Read

    4 Comments on this Story

    Sudesh k goyal397 days ago
    No loan waiver should b allowed above 25000 except in the case of death and the loanee below poverty line.
    It is public money.interest can be reduced waived. Rescheduling can b made.Interest rate shuld be 6% loan up to 2 lacs.Name ofloanee above 25 CR. should be made public to avoid misuse
    Mukul Goyal398 days ago
    Typically editorial for votes....bankers also suggested to make some strict laws to get back their money back from willful defaulters and stop debt waivers.....kindly write something for that also....don''t ruin this country....
    Rekha Rani398 days ago
    1.
    Scale of finance for agriculture should be same in Public and private sector Banks.
    2 Annual targets should be at par in public nd private sector Banks
    for agricultural nd other advances.
    3.For recovery of bad loans from willful defaulters there should be some effective nd speedy methods.
    4. State evel nd centre govts should consult the economists ,bankers before declaring rebates and loan waivers.annoucements made by political leaders regarding waiver nd rebates create a proble
    m of recovery for bankers.
    5.Moreover public sector Banks are responsible for social services i.e Narega, pension payments,small saving accounts, accounts for ration subsidy,gas cylinder subsidy other govt sponsored schemes
    Private sector Banks should also be given some responsibility of concerned area.
    Poor are not even allowed to open a small saving account in private banks as these people are not able to meet their conditions of minimum balance.
    The Economic Times