COIMBATORE: Farmers in Coimbatore are claiming that nationalised banks are refusing to issue No Objection Certificates (NOCs) required by Primary Agricultural Cooperative Societies (PACS) for obtaining Kisan Credit Card (KCC) loans.
R Periyasamy, a farmer from Theethipalayam, Coimbatore, said, "As per a new circular issued by the cooperative societies on July 17, farmers who have already obtained a KCC loan from any nationalised bank are now required to get an NOC from the concerned branch manager. When I approached my bank in Thondamuthur Taluk, they denied the NOC, stating that I already have an existing KCC loan with them. Many farmers like me, who have KCC loans with nationalised banks, are unable to obtain these NOCs."
S Palanisamy, district president of the Tamil Nadu Vivasayigal Sangam, said, "Cooperative societies offer a maximum of Rs 2 lakh at zero interest for a year, irrespective of the farmer's land area. This means a farmer cannot obtain more than this limit, even if they own over 10 acres. If a farmer cultivates bananas on one acre, for instance, they need a minimum of Rs 1.7 lakh as input cost. The KCC loan provided by PACS is simply not enough to cover expenses for all their land. Therefore, farmers resort to nationalised banks to obtain KCC loans under the interest subvention scheme, which offers an interest rate of 4%."
Palanisamy further said,"No bank will offer an NOC until the concerned farmer closes their existing loan. Officials in PACS are merely stating they will offer a loan once they receive the NOC from the banks. This new norm appears to be a tactic by PACS to curtail farmers from obtaining loans from nationalised banks, thereby crippling them economically." He demanded that the cooperative societies revoke the order.
When contacted, a senior official from the cooperative societies department said, "These norms have been implemented as per RBI guidelines. The objective is to prevent farmers from obtaining multiple KCC loans from various banks under the interest subvention scheme, as it offers a minimal interest rate. We have, however, received grievances from farmers regarding this issue, and we will bring it to the government's attention."