Many small farmers are facing difficulties in getting loans from banks to save crops hit by drought due to procedural hurdles, a farmers body said.
"Small farmers are made to run from pillar to post to get documents like 'no-due certificate' even as the Reserve Bank of India (RBI) has simplified lending guidelines for small loans," Consortium of Indian Farmers Association (CIFA) General Secretary P Chengal Reddy said here.
Reddy's allegation has come a day after the Centre announced to continue farm loan subsidy under which farmers are eligible to get credit at cheaper interest rates.
Last year, the RBI had advised commercial banks to dispense with the requirement of 'no-dues certificate' for small loans up to Rs 50,000 to small and marginal farmers and instead obtain 'self-declaration' from the borrower.
It had also asked banks to accept certificates from local administration and Panchayati Raj institutions in the absence of documents verifying the identity and status of landless labourers and farmers cultivating land on lease.
"However, many banks are not complying with the RBI's simplified lending rules," Reddy said, adding that small farmers are, thus, discouraged to approach banks for crop loans.
At present, only one third of the 100 million small and marginal farmers are getting credit at lower interest rates from the commercial banks, while the rest are depending on private lenders, he noted.
