Bathinda : The Punjab cooperative department has revised short-term crop loan rules under the Kisan Credit Card (KCC) scheme.




The new guidelines, effective from the Rabi season starting Oct 1, increase the required share-linkage money for members of Multipurpose Primary Agricultural Cooperative Societies (M-PACS). Small and marginal farmers with up to 5 acres of land must now pay 6% of their credit limit as share money, up from 3%, while large farmers must pay 9%, up from 3%.




The policy also restricts interest benefits. PACS members can no longer avail 3% interest subvention upon timely repaying the loan amount if they already claimed it from commercial banks. Previously, farmers were allowed to get the benefit of interest subvention up to Rs 3 lakh even if the loans were scattered across commercial and cooperative banks.




The revised guidelines are expected to impact financial health of nearly 3,500 PACS across the state as operational margin has been cut to 0.5% from previously 2%.




The change comes after district cooperative and state cooperative banks earlier this year raised strong objections against enhancing of the limits of short term loans from previously Rs 25,400 per acre each for Rabi and kharif crops to Rs 39,000 per acre for paddy and Rs 30,000 per acre for wheat.




Farmers have called for an immediate review. “The steeply enhancing share-linkage ratio to KCC loans from 3% to 6% and 9% for small and large farmers, stopping the benefit of multi bank interest subvention even for loans up to Rs 3 lakh loans is injustice. Even the decreasing operational margins of cooperative societies to only 0.5% will render many of the societies on the brink of clsiure. The state should review the revised policy for short term lending”, said Kulwant Singh , a farmer from Mansa.




Punjab Registrar Cooperative Societies Sanyam Aggarwal said short term lending policy under scale of finance (SOF) has been revised to ensure the financial sustainability across three-tier cooperative credit structure.