Kochi: The Kerala High Court has issued an order to ensure that farmers are not deemed as borrowers when Supplyco pays them money for procured paddy through banks. Justice Devan Ramachandran asked to take special care so that the Credit Scores (CIBIL Scores) of farmers are not affected in the process.  

The court took note of the statement of Supplyco’s lawyer Santhosh Peter that it is Supplyco who borrows loans from the banks and the money gets distributed among the farmers through it.  He also highlighted that such loans do not affect the CIBIL scores of farmers.

The court directed officials concerned to inform the bank consortium that the farmers are not the borrowers in such scenarios. If the intimation is not happening, then the notices will be issued to the banks to appear in front of the court.   

The court was giving the directions while considering a petition filed by paddy farmers for not receiving payments on time. 

While considering the matter, the court stated that farmers will remain protected and won’t be facing the brunt of the loans borrowed by Supplyco. 

The court also noted that people who are familiar with banking procedures understand that with the tripartite agreement, Supplyco is actually availing overdrafts from the banks. Hence, Supplyco will be deemed the borrower.