Banks denying loans for industries on agricultural land sparks debate

Chhatrapati Sambhajinagar

Entrepreneurs in Marathwada have raised serious concerns over banks refusing loans to set up industries on agricultural land, despite the region’s potential for agro-based processing units. They also questioned inconsistencies in bank charges, including fees for bounced cheques and penalties for prepayment of loans.

These issues were highlighted on Thursday during an interactive session between Reserve Bank of India (RBI) officials and small business owners at a Cidco hotel. The session aimed to create awareness about financial schemes available for micro and small enterprises. The panel included Biswajit Das, Manager of RBI’s Mumbai Division; general manager Sibo Nekhini and other senior officials. Former Traders’ Federation president Jagannath Kale criticized banks for denying loans solely based on land classification and urged the RBI to mandate collateral-free loans for young entrepreneurs. Other attendees raised concerns over banks undervaluing industrial plots in the Auric industrial area compared to government rates. Entrepreneur Tansukh Zhambad pointed out that banks dishonour cheques if KYC updates are not completed every six months, while Ajay Shah demanded that traders receive financial benefits similar to industries.

In response, manager Biswajit Das assured that banks had been instructed to align land valuation with government-set rates and to hold regular meetings with customers to address grievances.

During the discussion, Das also mentioned that linking current accounts to fixed deposits could allow balances exceeding the minimum requirement to earn interest. He further highlighted the Lakpati Didi Scheme, aimed at supporting women entrepreneurs. The event was inaugurated by Ashok Shirse, Project Director of the District Rural Development Agency.