Unions fear bank officers may be hauled up if farm loans turn sour

The four officers’ unions in condition-owned banking companies have jointly written to the Indian Banks’ Association (IBA) expressing apprehension that their members may well be hauled above the coals if the financial loans offered to smaller and marginal farmers (SMFs) all through the two-week campaign (February ten to 24) convert bitter later on.

The worry of the unions stems from the fact that the campaign for saturating Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) beneficiaries with Kisan Credit rating Cards (KCC) has been undertaken in the off season for crop cultivation in main parts.

Diversion of funds

Hence, they alleged that rural and semi-urban (RUSU) branches have been compelled to sanction KCC with no standing crop, which could lead to the diversion of funds. They added that owing to workers scarcity at these branches, it is complicated to be certain the conclude use of funds.

PM-KISAN was released in December 2018 to augment the income of SMFs. KCC allows farmers to meet up with their small-time period credit rating demands for cultivation of crops, write-up-harvest costs, use demands, functioning capital for maintenance of farm property and actions allied to agriculture, and financial commitment credit rating prerequisite for agriculture and allied actions.

Due to the fact the KCC accounts have been sanctioned in the off crop season, the four unions – All India Lender Officers’ Confederation, All India Lender Officers’ Association, Indian National Lender Officers’ Congress and National Organisation of Lender Officers – underscored that these accounts are not qualified for crop coverage coverage beneath the Pradhan Mantri Fasal Bima Yojana (PMFBY) scheme in a greater part of the parts.

Double financing

The unions alleged that numerous KCC borrowers do not utilise their financial loan funds for successful purposes and, that’s why, are unsuccessful to arrange the cash to repay financial loans. They also expressed worry that some farmers could have approached a range of lender branches by creating unique land paperwork, ensuing in double financing.

Due to the fact, on an typical, every RUSU lender branch had to sanction a bare minimum of one,000 accounts all through the campaign time period, the unions claimed it was perfectly-nigh unattainable to carry out pre- and write-up-sanction inspections for KCC accounts.

To highlight their worries on financial loans granted beneath particular drives, the unions cited the working experience of disbursing Mudra financial loans (up to ₹10 lakh to non-corporate, non-farm smaller/micro enterprises).

They alleged that lender managements exerted tension to achieve the targets beneath the Pradhan Mantri Mudra Yojana, whereby numerous officers have been compelled to disburse financial loans with no adequate evaluation. They emphasised that this resulted in speedy mortality of the financial loans.

Even further, disciplinary motion has been initiated in opposition to numerous officers for the ‘lapses’ dedicated all through the Mudra campaign, the unions added.