Lok Sabha Question No. 4543 (UNSTARRED), answered on 2016-08-12
Subject: Complaints against Loans
Ministry: FINANCE
Asked by: ANTO  ANTONY

## Government of India Ministry of Finance

## Department of Financial Services

## LOK SABHA

## Unstarred Question No. 4543

To be answered on August 12, 2016/Sravana 21, 1938 (Saka)

## Complaints against Banks

## 4543. SHRI ANTO ANTONY:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Government has received complaints against banks for denying loans to eligible candidates of agriculture/education loans in the recent past;
- (b) if so, the details and number of complaints received during the last three years, bank-wise; and
- (c) the steps taken/being taken by the Government in this regard?

## Answer

The Minister of State in the Ministry of Finance (Shri Santosh Kumar Gangwar)

- (a) & (b): Government receives complaints including complaints related to agriculture/education loans through various modes of communication and from various sources. On receipt of the complaints the matter is taken up at  appropriate  level  with  the  banks  concerned  for  corrective  action.  Separate  data  on  specific  nature  of complaints, such as complaints related to denying loans by banks to eligible candidates of agriculture/education loan is not maintained.
- (c) : In order to ensure availability of hassle free agriculture credit to farmers and education loan to student, the following major steps have been taken by the Government:-

## Agriculture Loan

-  The Government of India implements an interest subvention scheme for short term crop loans up to Rs. 3.00 lakh at a reduced interest rate of 7% per annum. Under the said scheme, additional subvention of 3% is  given to those farmers who repay their short term crop loan in time, thereby reducing the effective rate of interest to 4% p.a.
-  The  directions  on  Priority  Sector  Lending  (PSL)  issued  by  RBI  mandate  all  Domestic  Scheduled Commercial Banks to earmark 18% of their Adjusted Net Bank Credit (ANBC) or Credit Equivalent amount of Off-Balance Sheet Exposure (OBE), whichever is higher, as on the corresponding date of the previous year for lending to Agriculture.
-  In order to ensure that all eligible farmers are provided with hassle-free and timely credit by Banks for their  agricultural  operations,  the  Government  has  introduced  the  Kisan  Credit  Card  (KCC)  Scheme,  which enables them to draw cash to purchase agricultural inputs such as seeds, fertilizers, pesticides as well as meet other agricultural and consumption needs. Tenant farmers, oral lessees and share croppers are also covered under the scheme.
-  To  bring  small,  marginal,  tenant  farmers,  oral  lessees,  etc.  into  the  fold  of  institutional  credit,  Joint Liability Groups (JLGs) have been promoted by banks.
-  RBI  has  conveyed  to  Banks  to  waive  margin/security  requirements  of  agricultural  loans  upto Rs.1,00,000/-.

## Educational Loan:

-  All Scheduled Commercial Banks have adopted and implemented the Indian Banks' Association (IBA) Model  Educational  Loan  Scheme  for  providing  education  loan  for  pursuing  higher  education  in  India  and abroad. All the Banks are following guidelines issued by IBA/RBI.
-  All education loans upto Rs. 4 lakh are collateral free as per RBI guidelines. Further, Government of India  has  launched  a  Credit  Guarantee  Fund  Scheme  for  Education  Loans  (CGFEL)  wherein  no  collateral security/third party guarantee is required for loans upto Rs 7.50 Lakh.
-  In order to simplify the process of raising educational loans, Vidya Lakshmi Portal (VLP) (https://www.vidyalakshmi.co.in) has been launched by the Government. Students can view, apply and track the education loan applications made to banks anytime, anywhere by accessing the portal.