Aiming to pulling out farmers from the clutches of money-lenders, Punjab National Bank (PNB) will soon launch debt-swap scheme. Private money lenders charge interest varying from 50% to 200% against the loan due to which farmers never come out of the vicious cycle of debt trap.
Actually, farmers keep on paying the interest while the principle amount remains the same. Under this new initiative farmers can avail the loan up to Rs 50,000 to repay the loan to money lenders.
Talking to FE after the state level bankers? committee meeting (Haryana) JM Garg, executive director, PNB said, ?Farmers don?t need to produce documents if they want to take loan upto Rs 25,000. If the amount is above 25,000 then bank will carry out the verification procedure. To ensure the money is being rightly used, the bank will procure the certificate from money lenders declaring that debt has been written-off. The scheme will be introduced first in northern region and later will be launched in other parts of the country. Bank will charge the interest rate based on prime lending rate (PLR) from farmers?. Last year PNB had disbursed agriculture loan of Rs 20,000 crore last year and has set a target of around Rs 25,000 crore for this fiscal. The finance ministry has decided that at least 3% of the target for agriculture in 2008-9 is to be earmarked for giving loans under ?Debt Swap scheme?.
Bringing another initiative PNB is also set to launch concept of agricultural hubs across the country. Explaining about this venture Garg said, ?Our branches are getting overburdened with handling loan processing applications in agriculture sector, which usually cause unnecessary delays.
To solve these problems various hubs will be introduced where specialised staff will take care of the applications which will simplify the cumbersome procedure. The idea is that one hub will cater to the cluster of 20 branches?.