PNB to launch schemes for farmers

Punjab National Bank (PNB), to save farmers from the cruel hands of money-lenders is planning to launch debt-swap scheme. Farmer get trapped in cruel cycle of debt trap when he takes loan from private money lenders who charge high interest varying from 50% to 200% against the loan.

Farmers keep paying the interest while the principle amount remains the same. Under this initiative taken by PNB, farmers will be able to take loan up to Rs 50,000 to repay the loan to money lenders.

After the state level bankers committee meeting (Haryana) J M Garg executive director, PNB told FE, “Farmers don’t need to produce documents if they want to take loan up to Rs 25,000. If the amount is above 25,000 then bank will carry out the verification procedure. To ensure the money is being rightly used, the bank will procure the certificate from money lenders declaring that debt has been written-off. The scheme will be introduced first in northern region and later will be launched in other parts of the country. Bank will charge the interest rate based on prime lending rate (PLR) from farmers”. Last year PNB had distributed agriculture loan of Rs 20,000 crore and still has a target of around Rs 25,000 crore for this fiscal. On the other hand the finance ministry has taken a decision that at least 3% of the target for agriculture in 2008-9 will be earmarked for giving loans under ‘Debt Swap scheme’.

PNB has another plan in the process, the setting up of agriculture hubs across the country. Explaining about this venture Garg said, “Our branches are getting overburdened with handling loan processing applications in agriculture sector, which usually cause unnecessary delays.

To solve these problems various hubs will be introduced where specialized staff will take care of the applications which will simplify the cumbersome procedure. The idea is that one hub will cater to the cluster of 20 branches”.