Tamil Nadu: Farmers oppose mandatory CIBIL Score for availing crop loans
The entire farming community in Tamil Nadu are now up in arms against the new measure and want Chief Minister MK Stalin to immediately intervene and resolve the issue
Farmers approaching Erode collector to withdraw the mandatory CIBIL score to avail crop loans, on Monday
TIRUCHY: A recent directive from the Registrar of Co-operative Societies mandating the use of CIBIL credit scores to determine eligibility for agricultural loans has drawn sharp criticism from the Tamil Nadu Farmers’ Association, which has urged Chief Minister MK Stalin to intervene and roll back the order.
The circular, issued on May 26 by Registrar K Nanthakumar outlines model guidelines for disbursal of loans under the Kisan Credit Card (KCC) scheme for livestock maintenance and fisheries-related working capital. A key clause stipulates that co-operative societies must obtain the applicant’s CIBIL statement to verify the absence of any active or outstanding KCC loans from other banks or institutions.
The measure, according to the Registrar, is aimed at preventing duplication of loan benefits and enforcing the ₹3 lakh cap on the total KCC exposure across all sources. For standalone livestock/fisheries loans, the limit is ₹2 lakh without collateral.
Furthermore, the guidelines require all co-operative societies and central co-operative banks to disburse loans only through KCC-DMR accounts, and to verify and document loan eligibility with self-declarations, property liability records, and proof of livestock ownership. A photograph of the farmer with livestock, attested by society officials, must also accompany the application.
However, BS Masilamani, General Secretary of the Tamil Nadu Farmers’ Association, said that applying commercial lending norms such as CIBIL-based filters to farm credit is unjustified. “A farmer may default due to crop failure or disaster, not by design but due to nature. Penalising them through poor credit scores defeats the purpose of co-operative lending,” he said.
Masilamani noted that the Co-operation Minister had earlier assured that Reserve Bank norms would not strictly apply to the co-operative sector. “Yet this directive mimics commercial bank practices, pushing small farmers out of the loan net,” he added.
The Association demanded that the State government suspend the use of CIBIL scores as an eligibility tool for co-operative loans until a farmer-friendly, agriculture-sensitive credit evaluation system is established.
