Farmers in BJP Rastra

[swami]

Cash shortage created by Modi helping Moneylenders

Moneylenders cash in as bank loans to farmers dry up

MUMBAI: Demonetisation seems to have helped private moneylenders in Maharashtra. Of the Rs 13,558 crore of loans required for the rabi season, banks could disburse only about Rs 2,400 crore (18%), due to shortage of cash. Besides, there are restrictions on district cooperative banks (DCCBs).
Officials said the crisis gave moneylenders an opportunity to get rid of defunct notes as loans were disbursed in old notes and they will be paid back in new notes. The rate of interest levied by moneylenders ranges from 24% to 120% per annum as against the 9-15% charged by banks.

Of the amount disbursed, Rs 857 crore was from DCCBs and the rest from commercial and private banks. Sowing has been 120% of last year, and on 92% of the average area available for the rabi crop, which prompted increased borrowings.

The state government had allowed farmers to buy seeds and fertilisers using Rs 500 and Rs 1,000 notes, which helped moneylenders even more. "The area under rabi cultivation has gone up despite the small amount of bank loans being disbursed. This has meant that funds have been provided from sources outside the formal banking sector," said an official from the cooperatives department. Demonetisation was announced around the time sowing had just picked up in Maharashtra.
The receding monsoon was very good in the state— a favourable condition for the rabi crop.

"With weather and soil water content just right for a good produce, farmers couldn't give up on the season due to a lack of bank loans, and so they resorted to borrowing from moneylenders," said farmers' leader and activist Vijay Jawandhia.
http://timesofindia.indiatimes.com/i...w/56281580.cms

[raniraja]

The Sahukar must be blessing demonetization

A boom for microfinance, it is.

[sarv_shaktimaan]

I thought it was the opposite, the sahukar's facing a cash crunch are closing shop.

A couple of folks from my village were contacting whoever they can to adjust their petty cash (30-50L) .. I was jumping for joy when they contacted our family. All their employees can run away since they've been paid for 2-3 years.

[raniraja]

Originally Posted by sarv_shaktimaan

I thought it was the opposite, the sahukar's facing a cash crunch are closing shop.

A couple of folks from my village were contacting whoever they can to adjust their petty cash (30-50L) .. I was jumping for joy when they contacted our family. All their employees can run away since they've been paid for 2-3 years.

The sahukars must've found ways to exchange their currency. That's a safe assumption because about 95% is already been deposited in the banks

[sarv_shaktimaan]

Originally Posted by raniraja

The sahukars must've found ways to exchange their currency. That's a safe assumption because about 95% is already been deposited in the banks

But RBI/Finance Ministry, IT will be locking up money deposited in excess of 3-4 lakhs in jan dhan accounts.. and reviewing all the accounts with big deposits.

[swami]

Originally Posted by sarv_shaktimaan

But RBI/Finance Ministry, IT will be locking up money deposited in excess of 3-4 lakhs in jan dhan accounts.. and reviewing all the accounts with big deposits.

That move will surely bring congress back to power.

[raniraja]

Originally Posted by sarv_shaktimaan

But RBI/Finance Ministry, IT will be locking up money deposited in excess of 3-4 lakhs in jan dhan accounts.. and reviewing all the accounts with big deposits.

Those will be a minuscule portion, perhaps 1-2% of all the Jan Dhan accounts.

Anyway, this has nothing to do with the farmers borrowing from the sahukar.