Farm loans up to Rs 50 k should get service tax waiver

Small and marginal farmers availing agriculture loans up to Rs 50,000 need not pay any service charge and need not deposit land documents at bank branches. These are some of the recommendations of the group set up by the Reserve Bank of India to examine the procedures and processes of agriculture loans.

For loans exceeding Rs 50,000, the service charge should not exceed 0.25 per cent of the loan limit per annum, said the group’s report.

As there is no uniformity in the loan application forms prescribed by various banks, the group has suggested that the NABARD should issue and circulate the mandatory application forms among banks. The form should be simple, user- friendly and should use the local language. It should consist just of two parts - basic application form and - the relevant annexure depending on the activity.