Banks Hesitant to Issue Kisan Credit Cards to Dairy and Fisheries Businesses: SLBC

According to a quarterly report released last week by the SLBC, only 2.3 percent of KCC loan applications for animal husbandry have been approved, while only 0.9 percent of applications by fishermen have received loan approvals.

As per a recent report by the State Level Bankers' Committee (SLBC), Gujarat, milk cooperative unions have complained about banks being hesitant to sanction Kisan Credit Cards (KCC), which are specifically designed for the animal husbandry, dairy, and fisheries sectors.

In Gujarat, only 2.3 percent of KCC loan applications for animal husbandry have been approved, while only 0.9 percent of fishermen's applications have received loan approvals so far.

The percentage of applications that are rejected is also higher than the percentage of applications that are approved, according to the report, which also mentions the expanded scheme that offers collateral-free loans up to Rs 1.6 lakh.

"It is not that banks are reluctant," MM Bansal, convener of SLBC Gujarat and General Manager Bank of Baroda, explained the situation. He added, “There are a few issues that are causing delays in loan approvals under the KCC. Around 70% of milk farmers' accounts are held by District Central Cooperative Banks. The applicant must be a member of a primary agriculture cooperative society, or PACS, to be eligible for KCC funding. It takes time for the information to be processed. The sanctioning ratio will increase in the coming weeks."

Bansal said there are some issues where applications are not even filled out properly, which explains the high number of rejections in the animal husbandry and fisheries sectors.

According to last week's report published by the SLBC, “There had been repeated escalations by milk marketing federations about banks not processing KCC animal husbandry applications.” Further, it explains, “SLBC is also in the receipt of numerous representations from lead district managers about the reluctance of DCCBs (District Central Cooperative Banks) in accepting and processing KCC Animal Husbandry applications. SLBC has also received numerous complaints from lead district managers about DCCBs' (District Central Cooperative Banks) refusal to accept and process KCC Animal Husbandry applications."

The report asked that the Gujarat government, NABARD (National Bank for Agriculture and Rural Development), and GSCB (Gujarat State Cooperative Bank) issue appropriate directions to DCCBs in this regard, noting that cooperative banks have large accounts of beneficiaries credited for deposit of milk sale proceeds by district milk unions.