Farmers’ union petitions RBI against new norm relying on CIBIL score for gold loan

Karnataka State Sugarcane Growers’ Association President Kuruburu Shantkumar has urged the Reserve Bank of India to retreat the norms that prescribe bully CIBIL (Credit Information Bureau (India) Limited) people arsenic a pre-requisite to get golden owe indebtedness from banks.

A delegation of farmers led by Mr. Shanth Kumar met RBI apical officials present connected Thursday and submitted a memorandum to them successful this respect too explaining to them astir the inconvenience caused to farmers done specified norms.

Change since April 1

After gathering the RBI officials, Mr. Shanth Kumar told The Hindu that the RBI had changed the norms related to loans obtained by mortgaging golden loans with effect from April 1 this year.

“There was nary request to person a bully CIBIL score, that bespeak creditworthiness, for obtaining golden loans truthful acold arsenic the mortgaged golden itself was a information against immoderate defaulting. But since April 1 this year, you request to person a bully CIBIL people adjacent to get golden loan. This is anti-farmer arsenic astir of famers person made it a signifier to instrumentality attraction of their short-term fiscal requirements done golden loans arsenic they cannot get different loans easy owed to their mediocre CIBIL scores,” helium said.

“Farmers bash not get regular monthly incomes and hence their CIBIL scores are bound to diminution if they neglect to wage up adjacent 1 oregon 2 monthly installments. Due to specified debased CIBIL score, it is hard for them to get different loans. Hence they would beryllium heavy connected golden loans. But present it would beryllium hard for them to get adjacent golden loans,” helium observed, portion expressing interest that specified changes successful the indebtedness strategy would impact workplace sector.

He alleged that specified norms are bound to propulsion farmers towards backstage wealth lenders and backstage golden indebtedness operators who rapidly connection loans if they owe gold, but aboriginal cheat with precocious interests.

He suspected that specified changes whitethorn person been effected to crook the concern advantageous for the backstage fiscal institutions.

To petition FM

He said the farmers’ relation would petition Union Finance Minister Nirmala Sitharaman successful this regard, and declared that farmers would signifier protests passim the State if the caller norms were not withdrawn and gold loan process was not simplified by banks.