The Hindu Business Line : Farm loans up to Rs 50 k may get service tax waiver

Small and marginal farmers availing agriculture loans up to Rs 50,000 need not pay any service charge and need not deposit land documents at bank branches. These are some of the recommendations of the group set up by the Reserve Bank of India to examine the procedures and processes of agriculture loans.

For loans exceeding Rs 50,000, the service charge should not exceed 0.25 per cent of the loan limit per annum, said the group’s report.

As there is no uniformity in the loan application forms prescribed by various banks, the group has suggested that the Nabard should issue and circulate the mandatory application forms among banks. The form should be simple, user- friendly and should use the local language. It should consist just of two parts - basic application form and - the relevant annexure depending on the activity.

Freedom to decide

Farmers require timely and adequate credit. Therefore, bankers should have the freedom to decide the loan amount, said the report. The norms of the district-level technical committee with regard to the amount of the loan should only be used a broad indicator. The report also suggest that all loans having credit limit of up to Rs 50,000, should be disposed off within a fortnight and those with credit limits up to Rs 3 lakh, within four weeks.

More Stories on : RBI & Other Central Banks | Farm credit | Taxation

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