Borrowers asked to convert agricultural gold loans to Kissan Credit Cards
Kozhikode: Banks have sent notice to its customers demanding agricultural gold loans be converted to Kissan Credit Cards (KCC). The notice has been sent after the banks have completely stopped the approval of such loans.
The notice says that the action has been taken as the Central government cancelled the reduction in interest to agricultural gold loans that was approved after October 2019. The customers are worried about how to convert their loans to Kisan Credit Cards (KCC).
In order to get a loan of Rs 1 lakh through KCC, an individual needs to have at least half an acre of land in his/her name. Earlier, agricultural gold loan could have been availed with the submission of tax receipt for one cent of land. This means that majority of the people who availed agricultural gold loans will not be eligible to get KCC. Hence instead of the four percent interest stipulated earlier, the customers will have to pay nine percent interest for the loans now.
It is estimated that eleven lakh people will be affected by this decision. Out of the 74 lakh agricultural loans approved, 45 lakh are estimated to be agricultural gold loans. Those who are not able to change to KCC before March 31 will have to pay the extra tax. Banks will approve KCC only after taking in to consideration the nature of cultivation, size of the land among others.
In Kerala, 85 percent of the total KCC accounts are in corporative banks. Agricultural Minister V. S. Sunil Kumar said that scheduled banks are adopting a dismissive attitude towards this.