Saturday, 17 August 2013

SBI denying crop loans to fresh borrowers-TIMES OF INDIA

SBI denying crop loans to fresh borrowers-TIMES OF INDIA

Shishir Arya, TNN | Aug 17, 2013, 05.21AM IST

NAGPUR: The region's farmers, already facing a wet drought, are also finding it difficult to secure loans for sowing expenses. Loans are a necessity for farmers in Vidarbha. Poor economics of farming hardly leaves any investible surplus with them for next crop.

However, PSU banking behemoth State Bank of India (SBI), is learnt to have issued informal orders to its officers not to entertain applications forcrop loans by borrowers. This mainly pertains to districts of Wardha, Nagpur, Chandrapur, Bhandara and Gadchiroli, say sources in the bank. This has especially hit the farmers in Wardha where the district central cooperative bank (DCCB), the main source of lending for farmers is in a crisis. So the farmers depend on PSU banks.

Sources say many have been turned away from SBI's doors only because they were not among bank's existing borrowers. The unions too have taken up this issue pointing out that the officers manning rural branches are in a dilemma. There are only oral instructions not to entertain fresh cases. With no official orders, they cannot formally deny loans to any applicant. There is also chance that bankers may face ire of local leaders due to it.
The bank's management has denied the charge. Rajeev Fanse, assistant general manager at SBI's zonal office, no such orders have been issued. "Only those farmers who were earlier borrowers of other banks are not being granted loans if they don't produce a no-due certificate. The certificate is a proof that the farmer has not defaulted on any earlier loan. Others with a clean record are being given loan," said Fanse. He said the bank has seen an increase of Rs 31 crore on crop loans in last three months with the current tally at Rs 331 crore.

On the other hand, sources in the bank say denying loan for want of a no-due certificate is an established norm. There is no need to issue any orders for that. Even farmers with no-due certificate were being denied loans this time, a source said. An officer in the cooperative department at Wardha said he had received complaints from farmers who had approached the SBI but were not entertained. He said he had forwarded the complaint to bank's office at Nagpur.

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