TN cooperative dept now seeks NOC from nationalised banks for PACS crop loans

Hans India

4 days ago

Chennai: After facing widespread criticism over the mandatory CIBIL verification for crop loans, the Tamil Nadu Cooperative Department has introduced another controversial requirement for farmers seeking credit through Primary Agricultural Cooperative Societies (PACS).
According to a recent directive, farmers must now obtain a No Objection Certificate (NOC) from a nationalised bank to be eligible for loans under the cooperative system.
The new instruction, issued through a departmental circular, mandates that farmers secure a NOC from the branch manager of a nationalised bank located in their area or where they maintain an account.
This directive comes in the wake of an earlier order dated May 26, which required all crop loans disbursed through Kisan Credit Cards to undergo CIBIL score verification.
That move had already triggered sharp backlash from various farmer associations across the state.
Esan Murugasamy, founder of the Tamilaga Vivasayigal Pathukappu Sangam, strongly criticised the department's decision, claiming it was yet another tactic to discourage farmers from approaching PACS.
'Whether it is a CIBIL score, a CIBIL report, or now a NOC, the burden on farmers is the same. These measures are driving them into the clutches of commercial banks and increasing their debt risk,' he said.
Farmer groups argue that cooperative loans were originally designed to provide easy, affordable credit to small and marginal farmers, and these additional requirements defeat that purpose.
They fear that the mounting bureaucratic hurdles will erode trust in PACS and force more farmers to turn to commercial lending institutions with higher interest rates and stricter repayment terms.
However, senior officials in the Cooperative Department maintain that the process is being misrepresented and claim that it is simple and straightforward.
'A standard format letter will be given by the PACS. The farmer only needs to get it signed and sealed by a manager of a nationalised bank. This is just to ensure there are no overlapping loans,' an official explained.
Despite the assurance, farmer organisations remain firm in their demand that such additional compliance steps be scrapped altogether. They argue that these measures are impractical for rural farmers and undermine the very purpose of cooperative credit.
As discontent grows, farmer unions are planning to intensify their protests, urging the state government to withdraw the latest directive and restore easy access to cooperative loans without unnecessary hurdles.