A Reserve Bank of India (RBI) working group report has suggested that the compulsory crop insurance schemes for farmers may be made optional. The working group was set up to examine the procedures and processes of ?agricultural loans? especially for small and marginal farmers under the chairmanship of CP Swarnkar and submitted its report in April 2007.
The group has made this recommendation keeping the suggestions in the mind received from farmers. The crop insurance adds to their cost without much benefit accruing to them and therefore wanted that it should immediately be removed.
RBI had implemented some of the recommendations of the committee in its annual policy statement announced in April 2007. It then advised banks to immediately dispense with the requirement of ?no dues? certificate (NDC) for small loans up to Rs 50,000 to small and marginal farmers, share-croppers and the like and, instead, obtain self-declaration from the borrower. The group has recommended that the application form needs to be simple and uniform across the banks containing two parts ? a) basic application form and b) the relevant annexure depending on the activity. For loans of higher value and up Rs 3 lakh, the group suggests that the bankers may exchange the list of farmers who have availed loans in forums like Block Level Bankers? Committee (BLBC). The group also recommended, on a pilot basis, issuing of Kisan Smart Cards loaded with all the necessary informations pertaining to their borrowings, land holdings etc. This will make all the information pertaining to an individual borrower available at a single point.