PNB to adopt blocks to rescue farmers from clutches of moneylenders

Punjab National Bank (PNB) had launched ‘Debt Swap Scheme’ for the villagers but this scheme progress has been very slow. Considering this bank has decided to adopt a block in each district and this way it will be able to rescue the farmers from the clutches of moneylenders who charge very high rate of interest.

In view of this bank has revised the conditions of the Debt Swap Scheme. According to the state provisions majority of moneylenders are not registered and they give money privately without any documentary proof. Thus, they do not issue any certificate to the farmers. To stop this practice, PNB has planned to provide finance under the scheme on the basis of affidavit of the farmer. Also farmers won’t require obtaining a certificate of the moneylender discharging the borrower from total liability has been snapped.

Therefore, if the borrower requests for loan and branch manager agree to it, the entire loan of Rs 50,000 will be credited in borrower’s saving or Kissan Credit Card and the receipt for repayment from the moneylender might not be required.

In the beginning, at the Bamial Block of Gurdaspur the scheme was launched. Till September 2009, farmers from 10 villages have been rescued. Therefore seeing the success of the scheme banks have decided to introduce it in other districts.

As per the SLBC (state level bankers committee) data, compiled by Punjab National Bank, during the financial year 2009-10, bank has set a target to distribute Rs 27,122.54 crore. Also, for the debt swap it has set a target (on the basis of 3 per cent of agriculture) of Rs 813.68 crore.

Since the launch of the Debt Swap Scheme none of the private sector and cooperative banks in Punjab have provided assistance to farmers. Only regional rural banks and public sector banks have provided assistance to the farmers under the scheme.

In the state out of the total debt of over Rs 30,000 crore, the non-institutional loan share amounts to around Rs 14,000 crore.

Thus, banks can play a positive role in saving the farming community from distress under the Debt Swap Scheme.

According to analysis up to September 2009 under the scheme the major banks like Andhra Bank, Bank of Baroda, Corporation Bank, Bank of Maharastra, Dena Bank and Indian Bank and all private sector banks have not assisted even a single farmer.