Bathinda: Punjab govt has put on hold its April 7 decision to increase crop loan limits for farmers by 53%, following objections from cooperative banks, and will continue with last year’s rates for now.State govt had recently raised the per-acre loan amount for paddy from Rs 25,400 to Rs 39,000 under the scale of finance (SOF) for kisan credit cards (KCC), but cooperative banks said they lacked funds and were receiving reduced support from NABARD.The cooperative bank employees’ federation opposed the hike, citing weak finances of district banks, and even announced a two-hour strike on May 6. Farmers, however, backed the increase, saying limits were revised after seven years. Punjab has 20 district cooperative banks, several of which in Bathinda, Mansa, Ferozepur, Fazilka, Amritsar and Tarn Taran are struggling with poor loan recovery and have opposed the move.Cooperative Bank Employees Federation State of Punjab president Nitin Kakar said reduced refinance from NABARD and tight margins made it difficult to offer higher loans at subsidised rates without govt support.Punjab registrar (cooperative societies) Girish Dayalan confirmed that last year’s SOF had been extended for 2026-27, citing the need for procedural adjustments before implementing revised limits.Cooperative banks said they are under financial stress and cannot afford to give higher crop loans at subsidised rates.Kakar pointed out that funding support from NABARD had dropped from about Rs 3,500 crore in 2021-22 to Rs 1,110 crore in 2025-26, reducing the money available for lending.He added the system worked on thin margins. “NABARD lends to state cooperative banks at 4.5%, which is passed on to district banks at 4.75% and then to primary societies (PACS) at 5%. But with limited low-cost funds, banks are being pushed to borrow at higher market rates of around 7.1%,” he said. “At that rate, we incur a loss of over 2% because loans are still given to farmers at 5%,” said federation president Nitin Kakar.Kakar claimed that earlier setbacks like loan waivers and demonetisation had already weakened their finances. “With rising losses and limited funds, we have asked the govt either to provide financial support or roll back the higher loan limits,” he added.
