Bollywood blockbuster ‘Jawan’ is being screened these days. Even after allowing for cinematic exaggerations, the contents are far from the truth.
First, the movie shows relentless pressure by the banks on the borrowers so much so that they even drive away the tractor due to non-repayment of loans. Such measures are extremely rare in case of public sector banks. Even, in case of private sector banks which have a different recovery mechanism, such pressure, in case of tractor financing is unheard of.
On the other hand, in 2020, in a study carried out on reasons for poor bank recovery in Bihar, one of the observations was lack of follow-up by banks. Another fact observed during recovery visits along with bank officials is that all village people assemble on seeing the bank recovery team and there is intense pressure on the bank team as any forcible measure adopted is likely to lead to untoward incidents.
Second, the movie shows that the borrower commits suicide. Farmers’ suicide is also mentioned in few other scenes. Farmers’ suicides though very unfortunate have a different tale in many cases. In a case which was studied, way back in 2002, in Bathinda district of Punjab, it turned out that the entire village had defaulted to the banks but the suicide happened in only one case. Other factors are responsible for these unfortunate incidents.
Third, the movie has some reference to the farmer loan waivers and write-offs of big accounts. There have been instances in which the farmer borrowers did not repay the loan in anticipation of loan waiver but to be fair, the entire concept of agriculture loan waiver is to make the agriculture credit cycle move, which gets clogged due to non repayment of loans due to natural calamities or reasons such as Covid-19.
For the last decade or so, no blanket agriculture debt waiver has been announced by the Centre. Write-offs are essentially a financial transaction to cleanse the balance sheet of banks and do not mean that the borrower has been let off; the recovery measures continue.
Write offs do not absolve bankers from punitive action if some lacunae is observed in due diligence.
Last, there is a mention about the car loans being cheaper than agriculture loans. While it is true that pricing of the loans is related to the risk profile of the borrower and the collateral offered, an interest subvention to banks on farm loans makes it cheaper.
You-tubers and self-styled influencers are spreading a wrong narrative about the economy based on these misrepresentations. The movie is set in the time frame of the eighties.
The writer is former General Manager, NABARD. Views are personal