Cooperative banks insist on credit scores for loan approvals; farmers up in arms: Report
Farmers carried out a demonstration against the new rule of cooperative banks where they insist on members getting credit scores for availing farm loans and cattle maintenance loans, at Srivilliputtur, reported The Hindu.
The protest call was given by Tamilaga Vivasayigal Sangam. Aside from this, its president N.A. Ramachandra Raja, members of Primary Agricultural Cooperative Credit Societies P. Ammaiyappan and A. Vijayamurugan took part in the protest held in front of the office of Deputy Registrar of Cooperatives.
No collateral
Ramachandra Raja said the Reserve Bank of India in 2024 directed cooperative banks that any crop loan up to ₹2 lakh to the members should be given without any collateral.
“The maximum crop loan a member could get is only ₹3 lakh. However, when the loan amount surpasses ₹2 lakh, the farmers are supposed to give collateral for the entire crop loan,” Ramachandra Raja said.
Stating that when the members are giving collateral for higher amounts of loans and no collateral is required for loans up to ₹2 lakh, he asked, why do the Cooperative societies ask for credit score.
He said that loan applications of several members were rejected on lower CIBIL score.
“This is because the members could have got loans from any nationalised banks for their other domestic needs like education loan or other loans. Why should the cooperative banks be bothered about loans got from other banks?” he asked.
Besides, the members were also told to pay ₹120 for fetching CIBIL score.
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