Farmers in the state may find it increasingly difficult to secure bank loans as many of them face a fresh crisis due to falling CIBIL scores. Their CIBIL scores are falling through no fault of their own, undermining their creditworthiness.
Since the introduction of the PRS (paddy field) based bank loan system for purchased paddy, farmers have been experiencing an unintended impact on their CIBIL scores. Many farmers did not know that the payment they received from the government for the rice fields they bought was actually paid as a loan, with the government acting as guarantor.
“I never had any liability with my bank. But when I applied for a loan, I was shocked to find that my CIBIL score had dropped to 713 despite having a substantial fixed deposit. My score should have been around 875-900.”
“When I checked with the bank, I was surprised to find that I had allegedly availed a loan of ₹30,00,000 in the last three years, with a balance of ₹18,000,000 remaining to be repaid. In fact, it was the amount for the purchase of paddy fields that was treated as a loan and the government’s delay in paying the bank to the pensioner caused my CIBIL-idfarmer score from PAturn to drop, Sassurha.
Like Mr. Sasidharan, hundreds of farmers in paddy fields across the state are facing the same problem and many of them are unaware of it. “Most farmers realize the situation only when they approach the bank for a loan,” said Pandiyodu Prabhakaran, general secretary of Desiya Karshaka Samrakshana Samiti.
K. Muraleedharan, a farmer from Palakkad, said he was denied a bank loan in 2025 for the same reason. “At first I didn’t buy the bank’s explanation. It was only when a friend told me it was because of the PRS loan scheme for our purchased paddy fields that I understood and accepted it,” he said.
Although the state government acts as a guarantor for these loans, the technical responsibility rests with the farmers. “From the bank’s point of view, the question is simple: are you a borrower or not? If you are considered a borrower, your CIBIL score goes down. Almost all paddy farmers are classified as borrowers on this account,” said Mr. Sasidharan.
Published – 17 Jan 2026 21:33 IST