Tamil Nadu: Bank Held Liable for Agricultural Insurance Negligence

The Tamil Nadu State Consumer Redressal Commission has ordered UCO Bank to pay a farmer 80,000 in compensation for service deficiencies and negligence that prevented him from receiving crop insurance policies on time.

Ramachandran, who owns 1.3 acres of agricultural land, was registered with Rajashree Sugars and Chemicals Ltd, to whom he supplied produce. In 2009, Rajashree Ltd advised him to obtain a crop loan for the land as well as an insurance policy from New India Assurance.

Ramachandran was denied insurance for his dried-up crops due to a lack of rain because the premium was not paid. Both UCO Bank and Rajashree Ltd denied liability, prompting Ramachandran to file a complaint. The premium amount was discovered to have been collected in the current appeal.

UCO bank was held solely liable to pay 75,000 for service deficiency, 5,000 for mental agony and compensation, and 1,000 for litigation costs within four weeks, failing which interest at 12% per year would be applied. 

National Agricultural Insurance Scheme:

The National Agricultural Insurance Scheme (NAIS) is a government-sponsored crop insurance scheme that has been in place in the country since the Rabi 1999-2000 season as part of risk management in agriculture, with the goal of providing financial assistance to farmers in the event of crop failure due to natural disasters, pests, or diseases.

Crop insurance also protects farmers against crop loss due to natural disasters, extreme weather, or revenue loss due to agricultural market price fluctuations. A farmer who struggles with his plough will be assured that if a disaster occurs, he will at least receive some compensation.