To provide direct benefit to farmers and ease the pressure on them, the Indian Banking Association today issued advisory guidelines requesting banks to waive off the processing, documentation, inspection, ledger folio charges and all other service charges for Kisan Credit Card /crop loans up to 3 Lakhs.
In India, Land Holding pattern is dominated by Small and Marginal farmers (SMF) category Roughly 85 per cent of the total operational holding I the country (about 43 per cent of the gross cropped area) are in the SMF category. There are around 21.6 crore small and marginal farmers (or 4.3 crore families). Providing timely and affordable credit to this resource-constrained group is the key to attaining inclusive growth. The small and Marginal farmers are the most affected during times of floods, droughts, and other natural calamities. As per parliamentary standing committee on Agriculture, the losses due to climate change account for overall GDP loss of 1.5% of agriculture economy. The instability in income of the farmers due to various types of risks involved in the production, low bargaining power, etc, add more distress to the already affected farmers.
The Kisan Credit Card Scheme aims at providing adequate and timely credit support from the banking system under a single window with the flexible and simplified procedure to the farmers to meet the short term credit requirements for cultivation of crops, investment credit requirements for agriculture and allied activities and other needs.
In this context, it was learnt that some of the scheduled commercial banks are collecting a nominal amount of service charges towards processing, documentation, inspection, etc. for agriculture loans. However, some of the banks are collecting service charges which are at a bit higher. This is not irrespective of whether the loan is sanctioned or not. This often acts as a deterrent for the farmers to approach the banks for loans.