Farmers urge CM to revoke order linking CIBIL score with crop loans
Claiming that the State Registrar of Cooperative Societies (RCS) has directed officials to check farmers' Credit Information Bureau India Limited (CIBIL) scores before sanctioning agricultural crop loans, members of the Tamilaga Vivasayigal Pathukappu Sangam submitted a petition to the district administration here on Monday.
Led by its Erode South district secretary, K. Shanmugasundaram, the members said that in an order dated May 26, 2025, the RCS had instructed cooperative societies to verify farmers' CIBIL scores prior to sanctioning loans, including those under the Kisan Credit Card scheme.
They pointed out that while the State government provided crop loans based on estimated cultivation costs, the sanctioned amounts were often insufficient. For instance, although the actual cost of cultivating paddy was ₹76,000 per acre, the government fixed the loan amount at just ₹36,000 per acre. To cover the remaining expenses, including the cost of fertilizers, farmers were compelled to approach nationalised banks, where CIBIL scores were already a determining factor for loan eligibility.
Due to mounting losses, many farmers had been unable to repay these loans, which had been waived off twice in the past. However, they said the stringent norms of nationalised banks reportedly made it difficult for farmers to secure fresh loans.
As a result, cooperative societies had become the only viable source of crop loans. 'But the new circular has caused widespread panic among farmers across the State,' they said, appealing to Chief Minister M.K. Stalin to intervene and revoke the order.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Hindu
9 hours ago
- The Hindu
Farmers seek cancellation of CIBIL requirement for granting loans
Representatives of Tamil Nadu Farmers' Protection Association sought the cancellation of a recent circular on reviewing applicants' CIBIL credit report for loans issued by the State Registrar of Cooperative Societies and submitted a petition to Collector M.S. Sangeetha here on Monday. The Petitioners said that the circular mandated that all loans, including crop loans disbursed through cooperative societies under the Kisan Credit Card (KCC) scheme, should be granted only after reviewing the applicants' CIBIL credit report. C. Nethaji of the farmers' association argued that the move could severely impact small and marginal farmers who already face restricted access to institutional credit. He pointed out, 'While the Tamil Nadu government calculates paddy cultivation costs at ₹76,000 per acre, only ₹36,000 is currently offered as crop loans, pushing farmers to seek loans from traders and middlemen.' He contended that including cooperative society loans in the CIBIL database would disqualify many farmers from accessing future credit from nationalised banks. Highlighting Reserve Bank of India's 2017 KCC guidelines, the farmers noted that no provision mandated the use of CIBIL scores to determine eligibility. Citing a similar stance taken by the Maharashtra Chief Minister, who warned against rejecting farm loans based on credit scores, the petitioners urged the Tamil Nadu Chief Minister M.K. Stalin to revoke the circular in the interest of farmers. Madurai MP Su. Venkatesan opposing the circular asked why a cooperative society loan for farmers should be based on CIBIL, which was a private entity. 'These are moves targeted at the small and marginal farmers whose farming activities are mostly dependent on the miniscule loans from the banks,' he added.
The Hindu
11 hours ago
- The Hindu
Farmers in Coimbatore and Tiruppur districts demand withdrawal of CIBIL score requirement for crop loans
Farmers in Coimbatore and Tiruppur districts submitted petitions to the government on Monday demanding withdrawal of the directive issued last month by the Department of Cooperation, Food and Consumer Protection to the Cooperative banks to sanction crop loans at seven percent interest rate solely on the basis of the scores of Credit Information Bureau (India) Limited. Insistence on CIBIL scores would deny most of the farmers, who have been facing difficulties in settling the previous loans in the Cooperative banks due to difficult circumstances, the opportunity to avail themselves of the utility of the fresh crop loans, Easan Murugasamy, founder of Tamil Nadu Farmers' Protection Association said. Even the extent of credit is low. Against expenditure of ₹76,000 incurred for raising paddy crop on one acre, the Cooperatives Department releases agriculture loan to the extent of only ₹36,000, M. Ganesan, another senior functionary of the association, lamented. The farmers urged the government to take note of the clarification issued by the RBI that it had not issued any specific instructions regarding requirement of CIBIL score for grant of agricultural loan. The Department of Financial Services, Government of India, had, during 2019, issued advisory to banks to waive the processing, documentation, inspection, ledger folio charges and all other service charges for KCC/crop loans upto ₹3 lakh. Further, the RBI vide its notification dated 06 December 2024 'Credit Flow to Agriculture – Collateral free agricultural loans' had raised the limit for collateral-free agricultural loans from ₹1.6 lakh to ₹2 lakh., the farmers pointed out Referring to the deliberations during the May 2025 session of Lok Sabha, farmers said the Central government had taken note of the plight of farmers and had directed the nationalised banks not to ask for CIBIL scores to sanction loans for agricultural and allied purposes.
The Hindu
12 hours ago
- The Hindu
Farmers urge CM to revoke order linking CIBIL score with crop loans
Claiming that the State Registrar of Cooperative Societies (RCS) has directed officials to check farmers' Credit Information Bureau India Limited (CIBIL) scores before sanctioning agricultural crop loans, members of the Tamilaga Vivasayigal Pathukappu Sangam submitted a petition to the district administration here on Monday. Led by its Erode South district secretary, K. Shanmugasundaram, the members said that in an order dated May 26, 2025, the RCS had instructed cooperative societies to verify farmers' CIBIL scores prior to sanctioning loans, including those under the Kisan Credit Card scheme. They pointed out that while the State government provided crop loans based on estimated cultivation costs, the sanctioned amounts were often insufficient. For instance, although the actual cost of cultivating paddy was ₹76,000 per acre, the government fixed the loan amount at just ₹36,000 per acre. To cover the remaining expenses, including the cost of fertilizers, farmers were compelled to approach nationalised banks, where CIBIL scores were already a determining factor for loan eligibility. Due to mounting losses, many farmers had been unable to repay these loans, which had been waived off twice in the past. However, they said the stringent norms of nationalised banks reportedly made it difficult for farmers to secure fresh loans. As a result, cooperative societies had become the only viable source of crop loans. 'But the new circular has caused widespread panic among farmers across the State,' they said, appealing to Chief Minister M.K. Stalin to intervene and revoke the order.
