RBI to educate farmers about financial literacy

Vijay C Roy

Tribune News Service

Chandigarh, June 3

The RBI will educate farmers in Punjab and Haryana about the importance of responsible borrowing and agriculture finance. To empower the farming community, the central bank in association with National Bank for Agriculture and Rural Development (Nabard) and over 4,300 rural branches of scheduled commercial banks in these two states will reach out to them.

The farmers in these two states often became victims of reckless lending by some of the banks, which ultimately affected their repayment capacity. In recent past, it has been discussed in many forums that liberal lending by banks was affecting the credit culture in these state. 

At a meeting, earlier this year, PNB general manager PK Anand and convener, State Level Bankers’ Committee, had said, “Few of the banks are sanctioning agriculture loans more than the scale of finance prescribed by Nabard and the state government, resulting in farmers being over financed as compared to the land they are cultivating. Further, a large number of farmers are getting multiple loans from different banks. Due to over financing, the farmers are not able to service their loans and are under distress.”

As of March 31, 2019, the total institutional debt in Punjab was Rs 80,267 crore, availed by almost 28.35 lakh farmers. As far as Haryana is concerned, the total outstanding loan was Rs 53,954 crore accessed by 17.13 lakh farmers. 

According to the bankers, the debt of the farmers has grown manifold in the state in the past five years as compared to the income, resulting in indebtedness. 

So, this initiative by the RBI and others will go a long way in educating them about the optimum utilisation of advances. Under the Financial Literacy Week (FLW), it will disseminate to the farmers the benefits of repaying loans on time, improving credit score and simplified mode of availing agricultural finance. 

“Financial Literacy Week 2019 is being observed from June 3-7 on the theme of “Farmers” and how they benefit by being a part of the formal banking system. In the recent years, the central bank has undertaken several initiatives to strengthen credit delivery mechanism and this is a step in this direction,” said Anil Kumar Yadav, general manager, RBI.

According to officials, the growth in agriculture is necessary for the overall economic growth and finance is an essential enabler for the same. The focus of the awareness campaign is on nudging the farming community from the informal to the formal financial sector.

In order to build awareness and disseminate financial literacy messages to the farming community, “focused content in the form of posters and leaflets have been prepared for dissemination. Banks have been advised to display the posters and content in their rural bank branches, Financial Literacy Centres, ATMs and websites,” said an official.

The bank officials through branches, Krishi Vigyan Kendras, Farmers’ Club and Financial Literacy Centres will dwell upon themes such as credit discipline, natural calamity relief, warehousing receipt finance, crop insurance, Kissan Credit Card and Digital Money to the farmers to increase awareness.

BANKING RESPONSIBLY 

• Agencies involved: RBI, Nabard, commercial banks
• Bank branches: 2,652 (in Punjab), 1,696 (in Haryana)
• Other modes: Krishi Vigyan Kendras, Farmers’ Club, Financial Literacy Centres

.