Banks pushing farmers towards arhtiyas

Ruchika M Khanna

Tribune News Service

Chandigarh, February 11

Farmers in Punjab, having among the highest rural indebtedness in the country, are accusing the banks of turning them away from institutional source of finance to non-institutional source of finances like arhtiyas.

As cases of suicide by indebted farmers registering an increase, farmers are saying that banks, besides restricting the lending, have started taking coercive steps like filing cases against defaulting farmers and possessing their pledged properties. This, they say, is again turning the farmers towards arhtiyas for availing loans, often at rates of interest ranging between 18-24 per cent against 4 per cent charged by banks.

Sukhpal Singh, who has been chronicling farm distress and suicides, told The Tribune that the suicide rate was equal whether loans were taken from banks or commission agents. He fears that the coercive steps by banks could aggravate the situation.

The total farm debt in Punjab is estimated at Rs 1,00,000 crore. MS Sidhu, eminent agriculture economist, told The Tribune that loans availed by farmers from institutional sources (mainly banks) were to the tune of Rs 79,963 crore. “On the other hand, loans from private money lenders are estimated at Rs 20,000 crore. Also, 70 per cent of the loan availed from banks is crop loan with 30 per cent being taken for lifestyle expenses under the garb of crop loan,” he said.

Data accessed by The Tribune from the State Level Bankers Committee (SLBC) shows that the growth in agriculture advances has fallen from 9.24 per cent (between September 2016-September 2017) to 3.65 per cent between September 2017-September 2018.

Sukhdev Singh Kokrikalan, general secretary, BKU (Ekta-Ugrahan), said coercive steps taken by banks were pushing farmers further in the clutches of arhtiyas and private moneylenders. “We are compiling a list of cases filed by banks against farmers. They are not supposed to demand post-dated cheques as loans are advanced by mortgaging our land. But almost all banks are doing so. In case of default, the cheques are presented and get bounced. The banks then drag farmers to court,” he rued.

Farmers from across the state have decided to take on banks over the issue. An indefinite sit-in has been planned outside banks in Ludhiana, beginning February 18. This has sent alarm bells ringing within the banking circle. The State Level Bankers Committee, that is scheduled to meet on February 15, is taking up the issue and is likely to ask all banks not to take “double surety” of pledging land and demanding post-dated cheques.