PNB asks Punjab bankers to implement debt swap scheme

Considering the low progress of Debt Swap Scheme in Punjab and to rescue farmers from the clutches of moneylenders who charge exorbitant rate of interest, convener bank for the state, Punjab National Bank (PNB), has asked the lead district managers to report the action taken by them to implement the scheme effectively in their districts.

The disbursement of the banks under the scheme during the period was 10.52 per cent of the designated target. Under the debt swap scheme, farmers can take a loan from the bank and repay to moneylenders.

Chairing the meeting, PNB, executive director, Nagesh Pydah said, “In order to save the farmers from the clutches of money lenders, Bankers should sensitise the market committee. Farmers Club can also play an important role in disseminating information to the farmers.” He also asked the lead district managers of the Banks to report in next SLBC meeting.

The progress of the scheme is not satisfactory in the state. According to the SLBC (state level bankers committee) data, compiled by Punjab National Bank, during the financial year 2009-10, the total disbursement target was Rs 28045.63 crore. Further, the target for the scheme(on the basis of 3 per cent of agriculture credit) was Rs 841.4 crore. However, against the target, the Bank in Punjab achieved only 10.52 per cent of the target. Banks in Punjab has disbursed only Rs88.5 crore in the financial year 2009-10, against the designated target of RS 841.4 crore.

None of the private sector and cooperative banks in Punjab have provided assistance to farmers under the Debt Swap Scheme. Only regional rural banks and public sector banks (barring a few) have assisted farmers under the scheme. Banks in Punjab have decided to adopt a block in each district of the state to implement debt swap scheme.

Punjab farmers are highly debt ridden. Of the total debt of over Rs 30, 000 crore, the share of the non institutional loan in the state is about Rs14,000 crore. So, banks can play a proactive role in saving the farming community from distress under the debt swap scheme.

Also, PNB has recently revised some of the stipulation of the Debt Swap Scheme to popularise it. Since majority of money lenders are not registered as per the provision of Punjab and they are lending to farmers privately without any documentary proof, consequently they are reluctant to give any certificate to the farmers. To remove this hurdle, PNB has decided to allow financing under this scheme on the basis of affidavits of the farmers.