An unholy nexus of a section of bank employees and middlemen has turned the subsidized Kisan Credit Card loan scheme a milch cow. Unscrupulous elements are siphoning off the loan amount in connivance with a section of bank officials and there seems to be no respite from the ever increasing Non Performing Assets (NPA) of banks in Assam. This is evident in Hojai, Morigaon and Nagaon districts.
It is found that a section of bank employees in cahoots with middlemen is taking advantage of the lack of elaborate documentation and continuous appraisal process for availing of loans. The Murajhar SAB of State Bank of India located at Hojai district of Assam is an example of one such branches that had sanctioned loans violating the laid down norms. The bank had sanctioned loans to the tunes of several crores of rupees to dubious, non-existent farmers and even in the name of dead persons in between 2013-2018.
It is found that the Murajhar branch has sanctioned KCC loans on the basis of forged and fake documents. The bank manager and the field officer did not even bother to check the authenticity of documents submitted for KCC loans. Even a huge tranche of loans were illegally transferred to certain bank accounts opened by those involved in the racket. The transferred amounts were withdrawn frequently from four to five accounts through ATM cards.
The modus operandi of the KCC loan racket is simple. They first collect the existing KCC loan holders name and address from the bank records and then forge the documents and photographs before applying for renewal of the loans albeit with the help of the branch manager and field officer. The field officer then without any physical verification submits the OK report, the manager then sanctions the renewal of loans. The sanctioned amount is then diverted to the middlemen or his brother’s account. Obviously the bank manager and the field officer get their pie of shares of the renewed loans in cash or kind as well.
There are two instances when KCC loan was renewed in the names of beneficiaries in 2015 and 2016 even though they had expired in 2012. Similarly, it has been found that a beneficiary who died in 2012 was granted renewal of loans in 2014 and 2015.
This year too, the racket has submitted around 700 to 800 applications for fresh and renewal of loans.
The KCC was introduced in the year 1998-99 to facilitate the farmers. Banks offer KCC loans at 7% interest and get a 2% financial backing from government on loans up to Rs 3 lakh. Since there is no requirement for collateral security for loans up to a specific limit, recovery of loans has become difficult. The loan syndicate is well acquainted with all the terms and condition and running the roost.