CIBIL score mandatory to get farm loans: RM

Ongole: A three-acre farmer from Santhanuthalapadu village, Kareti Venkaiah visited a bank in his village for farm loan on Monday. The bank rejected his application and said that his creditworthiness is very low as per the transactions recorded on CIBIL, Credit Information Bureau (India) Limited, a credit information company. The bank quoted that he is used to be a defaulter and does not pay the installments for the earlier loans in time. Venkaiah, who didn't have much gold to take the loan, said The Hans India that he should take a loan from villagers, who considers his problems but not CIBIL score.

The denial by the banks due to low CIBIL score is not the problem of Venkaiah only, but the problem of thousands of other farmers in Prakasam district and across the state. Syndicate Bank is the lead bank for Prakasam district. Bank's regional manager Tadi Ramakrishna said that the RBI has made CIBIL score as a mandatory for any type of loan long ago, but the banks didn't imply it seriously. But the RBI sent a fresh guidelines making verification of CIBIL score compulsory for any loan including the farm loan. He said they check the credit track record of farmer or customer based on the product and try to take a favorable decision.

When asked about the loan waivers offered by the parties, the RM advised the farmers to not believe in their local leaders. He said the ground level leaders were obstructed the farmers who are willing to pay the loans, by promising that their government will waive off the loans completely. But he announced that the State or Central government were not going to offer any loan waivers and they have authentic information about it. He advised the farmers to settle the earlier loans immediately and restructure them, to save on the interest. He said they were giving new farm loans to the farmers whose credit track record is good, by giving concession on interest.

Ramakrishna also said from the coming October, the RBI was canceling its interest subvention on gold loans. He said the decision of RBI will increase interest on the gold loan by 3 per cent so that there will be no special category like the gold loan for farmers and they too should pay the complete interest as others.

The RM advised the farmers to keep paying the installments of loans in time to keep the high CIBIL score. He said the high score can be maintained very much required if they happen to apply any education or personal loan in the future.