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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.
