InfraLive September-15, 2025

Exploiting Farmers in Difficulties – Kisan Gold Card InfraLIVE September 15, 2025 57 www.infralive.com o far (till Part-9 of the story) S whatever we have covered was directly concerning Lilavati Trust. However, this part of the story is not directly linked to Lilavati, but indirectly. In this last part of the story we are touching upon HDFC Bank's illegal recovery practice of loans given under Kisan Gold Card (KGC) scheme. When the Vajpayee government was at the centre, in August 1998, a scheme called Kisan Credit Card (KCC) was launched for providing timely and affordable credit to farm- ers for their agricultural and allied needs. At that time, the government of India used to provide interest subven- tion of 2 pc, and prompt repayment incentive of 3 pc, thus making the credit available at a very subsidized rate of 4 pc per annum. The KCC's initial validity period was five years, which was extended from to time. The limit granted under KCC to individual farmers used to be enhanced with every cropping cycle, depending on the extent of cropping pattern, pro- duction and repayment behaviour of the farmers. The banks were allowed to take suitable collateral as per their ownpolicy. HDFC issued KCC as KGC. At the time of granting loans to farmers under KGC, besides usual collateral, HDFC adopts two additional unethi- cal recovery strategies. One, as far as possible, to include a female member of the family, as a guarantor or co- borrower. Two, take three undated signed cheques each from the borrow- ers and co-borrowers for 30 pc, 60 pc, and 100 pc of the loan amount, under the guise of security, which later HDFC would misuse to file criminal cases against farmers, to coerce them inpaying dues. Generally, loans availed through KCC/KGC in Punjab and Haryana are payable in half-yearly instalments, linking it with cropping activities. And if a borrower continuously misses three installments (ie no payment for 18 months), then the bank declares Part-10 Exploiting Farmers in Difficulties – Kisan Gold Card How HDFC turns a Civil liability into Criminal liability Negotiable Instruments Act (NI Act). This way, HDFC converts a civil liability into criminal liability to put pressure on the borrowers to pay themissed instalment. This way, at each 6-month cycle, on an average, HDFC used to file about 500 criminal cases per district. HDFC is the only bank whose Section 138 cases would be the highest in courts, compared to all other banks put together. To avoid criminal prosecution, about 80 pc of these farmers then resort to borrowing from individ- ual moneylenders at much higher interest rates to pay HDFC. This way they get into a debt trap. The other 20 per cent, who are unable to make alternate arrangements to pay bank, face criminal pro- ceedings before a magistrate court. While presenting its case before the court, HDFC pretends as if the bounced cheque was recently given by the borrower at the HDFC branch. For this, they remove one paper from their such an account NPA and resorts to recovery mechanism through legal means – but under civil laws, not criminal laws. But, that is only on papers. On ground, HDFC follows an unethi- cal practice. For the past two years, as soon as a borrower misses an installment, the local loan-recovery team is alerted (earlier HDFC used to follow 18 months norm). They put a stamp date on the undated cheques, which they then present for clear- ance, which gets rejected due to insufficient balance. The bank then sends a notice to the bor- rower under Section 138 of the