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.
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