ALLEPPEY: The suicide note of KG Prasad (55) of Thakazhi stated that his CIBIL score was affected by the loan of paddy procurement money under the PRS scheme and this led to him being denied further loans. The same letter says that the arrears of the agricultural loan taken in 2011 were overdue and the liability was cleared in 2021 through a one-time settlement. Prasad, like many farmers, was unaware of the danger lurking in a one-time settlement.

When the loan arrears are cleared through a one-time settlement, it will be included in the 'Settled' category. This term is computed in such a way that the borrower has no repayment capacity. This can lead to a drop of up to 100 points in the CIBIL score. Documents will be recorded as settled for up to seven years and no loan will be availed during this period. Most of the farmers clear their debts through one-time settlements like this. Only when they approach financial institutions for a loan will they come to know that they have lost their CIBIL score and will not be able to get a loan for up to seven years.

It is the duty of the government to pay the paddy procurement amount to the farmer's account on time. Failure to do so will result in loss of the farmer's CIBIL score. Farmers do not start farming using only the money in their hands. Many people take loans in various ways to start farming. When the price of paddy is not available on time, the borrowed money cannot be paid back and the farmer sinks into interest. This was also a setback in Prasad's case.