Financial Daily from THE HINDU group of publications
Tuesday, Jun 25, 2002
Financial Daily from THE HINDU group of publications Tuesday, Jun 25, 2002 |
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Money & Banking
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Credit Cards & Debit Cards Agri-Biz & Commodities - Credit Cards & Debit Cards Farmers don't fancy credit card facility Rajalakshmi Menon
MUMBAI, June 24 THE Finance Minister, Mr Yashwant Sinha's dream for empowering farmers with credit cards may take a while to materialise. The Reserve Bank of India has found that farmers are not too enthused by the Minister's idea. In a recent study, the RBI has discovered that a major hurdle for the slow progress in the issuance of the cards was that farmers were neither willing nor interested in availing themselves of Kisan Credit Cards (KCCs). This was because some of them were well-to-do while others held jobs, with their land being cultivated by sharecroppers. Some of them had been cultivating lands under oral lease or under contact basis while others did not possess land-holding certificates. The Budget had spoken of the "resounding success'' of the KCC scheme and banks have been urged to make suitable plans for covering all eligible borrowers in the agricultural sector under KCCs by March 2004. In the study on the implementation and operational problems of KCCs, the RBI has said that the progress made in issue of KCCs to all eligible farmers needs to be accelerated. The lack of upgradation of land records, small land holdings and illiteracy of borrowers have been some of the other problems hindering the progress of the scheme. Though the study has proved that on the whole the scheme has been well received by farmers in terms of timeliness, hassle-free operations as also adequacy of credit including consumption, it has recommended sensitisation of bank staff through training programmes and progress under the scheme to be monitored in the SLBC meetings. According to the RBI, some of the other issues include the failure of some private sector banks has reduced the progress of issuance as well as the absence of any village survey by banks to identify eligible farmers. Further, the study has stated that some farmers would not approach banks out of fear that bank loans may put them in trouble, while others residing in far off locations were also not interested in the scheme. On the basis of interactions between bankers and borrowers and in a bid to make the scheme more popular, the RBI has said that there was a need for greater publicity to popularise the scheme as also for the education of the farmers. "Even after three years of existence of the scheme, many farmers use the card as a production loan and make withdrawals and deposits on a half-yearly basis unaware of the flexibility provided in the utilisation of limits," the study said.
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