THIRUVANANTHAPURAM: Bringing a major relief to borrowers, State Level Bankers’ Committee (SLBC) chairman and Canara Bank managing director R A Sankara Narayanan said banks will continue to extend cheaper gold agriculture loans. His clarification came amid reports that the Centre was planning to discontinue the popular loan scheme from October. “There is no hesitation from banks to extend agriculture gold loans to genuine borrowers,” he said, though he did not clarify how would banks assess the genuineness of each borrower.
According to him providing agriculture gold loans has not affected the banks’ priority sector lending. He said taking gold loans from banks was any day better than borrowing from a private money lender. Most banks offer a maximum of `3 lakh under the gold agriculture loan scheme. Lucrative scheme attracts non-farmers tooAn interest subsidy component makes it an attractive loan scheme even for non-farmers.In Kerala, the scheme is so successful that it constituted 62 per cent of the total agriculture loan of `80,803 crore for the financial year 2018-19.
The state government had approached Union agriculture ministry and RBI demanding discontinuation of gold agriculture loans and route all agri-related loans through Kisan Credit Cards.
The request was made after it was found out that the benefits of gold agri loans were being cornered by non-farmers.
A five-member team consisting of officers from Union agriculture department, RBI, SLBC and Nabard had visited 30 commercial banks in five districts in the state to study the situation. Agriculture minister V S Sunil Kumar had said the state government along with banks would promote Kisan Credit Cards to provide collateral-free loans to farmers. The state had also asked the banks to increase the limit for such loans from `1.67 lakh to `3.25 lakh.