Guj HC notice to Centre, SBI over Fasal Bima Yojna

The Gujarat High Court today issued notice to the Centre, the Gujarat government and others on a petition alleging that nationalised banks were "arbitrarily" collecting excess premium under a central scheme.
Congress MLA Harshad Ribadiya along with eight farmers approached the high court alleging that nationalised banks are collecting excess premium and various other charges illegally on the crop insurance taken under the Pradhan Mantri Fasal Bima Yojana (PMFBY).
Justice R M Chhaya also issued notice to the district collector of Junagadh and the State Bank of India's (SBI) Junagadh branch and posted the matter for further hearing on June 16.

In the petition, Ribadiya and the farmers accused nationalised banks, who work under the aegis of the SBI to implement the crop insurance scheme, of charging excess premium and deducting it directly from the bank accounts of farmers without their knowledge.
Ribadiya represents Dhari seat of Amreli district while other petitioners are from neighbouring Junagadh district.
Since crop insurance has been made mandatory for taking agricultural loan, Ribadiya claimed that under the Pradhan Mantri Fasal Bima Yojna, premium has been charged even when the the farmers have not taken any loan from the bank.

The maximum premium to be charged for Rabi crop is 1.5 per cent while for kharif, it is 2 per cent. Thus, someone who takes a loan of Rs 1 lakh for kharif season, need to pay a premium of Rs 2,000 while the interest on loan comes to Rs 4,000 at 4 per cent, said the petition.

Petitioners alleged that there are instances wherein banks have collected almost double the actual chargeable amount of Rs 6,000.
In some cases, banks even deducted the premium for a crop which was not even harvested by the farmer, alleges the petition.
It further alleged that banks are arbitrarily deducting money in the name of processing fees and inspection fees.
In all, the petition alleged that as against the actual deductible amount of around Rs 6000 to Rs 7000 for a loan of Rs 1 lakh, banks are charging a hefty sum of Rs 15,000 to Rs 22,000.