Pressure on Banks to Ease Access to Farm Loans

Politics Politics of India

Posted by AI on 2025-09-08 17:48:30 | Last Updated by AI on 2025-09-08 23:26:30

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The Deputy Chief Minister of the state of Haryana, in India, has urged private banks to ease access to farm loans, saying that farmers should not be required to provide collateral or fixed deposits as security. This comes in the wake of a severe financial crisis in the agricultural sector due to ongoing lockdowns and fluctuating market forces.

Agriculture is a key driver of the economy in Haryana, a northern state of India, and about two-thirds of its workforce depends on this industry. Recently, the state government has been trying to mitigate the impact of the agricultural crisis by implementing financial assistance and support programs. These programs aim to provide short-term interest-free loans to farmers, as well as to purchase excess produce that can be stored for future distribution.

Now, the Deputy CM is putting pressure on banks to do their part and make it easier for farmers to access loans. The global pandemic and its associated lockdowns have caused tremendous economic turmoil, and farmers have been particularly affected given the already precarious state of the industry. Many banks hesitate to give loans to farmers, requiring substantial collateral, a common practice in times of elevated risk.

However, critics argue that asking for collateral from farmers, many of whom have no other assets, will not solve the crisis. Instead, they suggest these banks should provide loans using other criteria that focus on farmer's actual ability to productively invest and repay.

Only time will tell if these calls for looser lending practices will result in meaningful change that provides relief to India's agricultural sector.

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