Why is the TN Cooperative Dept Now Requiring NOC from Nationalised Banks for PACS Crop Loans?

Chennai, July 19 (NationPress) Following significant backlash regarding the obligatory CIBIL scrutiny for crop loans, the Tamil Nadu Cooperative Department has imposed yet another contentious requirement for farmers applying for credit via Primary Agricultural Cooperative Societies (PACS).

As per a recent announcement, farmers are now required to obtain a No Objection Certificate (NOC) from a nationalised bank to qualify for loans through the cooperative framework.

This new rule, disseminated through a departmental circular, stipulates that farmers must secure a NOC from the branch manager of a nationalised bank situated in their locality or where they hold an account.

This directive follows an earlier mandate issued on May 26, which mandated that all crop loans distributed through Kisan Credit Cards undergo CIBIL score verification.

This earlier move had already sparked intense criticism from various farmer organizations throughout the state.

Esan Murugasamy, the founder of the Tamilaga Vivasayigal Pathukappu Sangam, vehemently opposed the department’s choice, asserting that it is yet another ploy to deter farmers from utilizing PACS.

“Whether it’s a CIBIL score, a CIBIL report, or now a NOC, the burden on farmers remains unchanged. These initiatives are pushing them towards commercial banks and heightening their risk of indebtedness,” he stated.

Farmer groups contend that cooperative loans were initially intended to furnish accessible, affordable credit to small and marginal farmers, and these new stipulations undermine that objective.

They are concerned that the increasing bureaucratic obstacles will diminish trust in PACS and compel more farmers to resort to commercial lenders, who impose higher interest rates and stricter repayment conditions.

Conversely, senior officials within the Cooperative Department argue that the procedure is being misrepresented and assert that it is both simple and uncomplicated.

“A standardized letter will be provided by the PACS. The farmer merely needs to have it signed and stamped by a manager of a nationalised bank. This is merely to prevent overlapping loans,” an official clarified.

Despite these reassurances, farmer collectives continue to demand the elimination of such additional compliance measures. They argue that these requirements are impractical for rural farmers and compromise the essential goal of cooperative credit.

As dissatisfaction mounts, farmer unions are planning to escalate their protests, urging the state government to revoke the latest directive and restore unobstructed access to cooperative loans without unnecessary barriers.