New method Kissan Credit Card scheme to 9 crore PM-Kisan beneficiaries in 2 weeks.
The Prime Minister had promised that they would not interfere with Banks. He had accused the previous government of doing ‘phone banking’ to give loans. This government’s interference became visible with MUDRA loan applications distributed by the party offices, loans disbursed by the presence of Central Ministers and Dept. of Financial Services calling up chairmen’s & MDs of banks to increase the targets. Now these loans are becoming Non-Performing Assets. The loans disbursed are Rs 10.24 lakh crores to Rs. 20.84 crore accounts, as on 1st November 2019. One example will show what is happening. In Chennai, SBI disbursed around 900 loans to goldsmiths to the tune of Rs 3 lakhs to Rs 5 lakhs with an intention to uplift them. They are doing well. But due to the campaign by BJP that they brought the loans for these people, more than 50% of the loans are becoming NPA. A feeling has been created that there is no need to repay the loans under the government-sponsored scheme. The banks have started an accountability study against the officers involved in sanction of the loan.
The Finance Minister announced that all the beneficiaries of Pradhan Mantri Kissan Nidhi [PM-KISAN] under which Rs 6000 per year is given to farmers with effect from 1-12-18 will be now eligible for the Kissan Credit Card scheme [KCC] which was launched in 1998.
Now the Ministry has written to the banks that the banks are not doing adequate for the saturation campaign which was launched on 10th February 2020, as this campaign is to conclude by 24th February 2020 and the Prime Minister will announce on 29th February 2020 at Chitrakoot in UP, the government scheme announced in the budget and will be launched.
Banks which are understaffed especially in Rural and Semi Urban [RUSU] branches which have to disburse these loans have already covered 6.67 crore accounts. Now they are forced to cover 2.33 crore accounts more within February. This means on an average each RUSU branch has to disburse 1000 loans for which they don’t have staff. Finance Minister is going to visit North East and few other states and Chairmen and Managing Directors are travelling to states to disburse loans. KCC is a crop loan whereas in most parts of the country there is no standing crop now. Then how do the banks inspect? What about KCCs that are already NPA? What about the Rs 15 lakh crores for KCC announced in the budget, which is not government money but the people’s money? Will these loans come back? Already people are asking – when corporates are not repaying, why should we repay?
These loans are also not for the majority – the landless, but for farmers, who own land upto 2 hectares or around 5.5 acres? Most of these lands could be leased ones. The lessee does not get the loans or PM-KISAN subsidy.
Are we not going towards a crisis? The KCC sanctioning power given to branch managers are Rs 3 lakh. 9 crore borrowers getting Rs 3 lakh each is Rs. 2,70,000 crores. Even if it is Rs 1 lakh each it is Rs. 90000 crores. Will the banks survive? The faith in the Banks is going down. Is this not a loot? Is this bankrupt government working towards a financial emergency?
“It is well enough that people of the Nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning” – Henry Ford
Thomas Franco is former General Secretary of All India Bank Officers’ Confederation.