🥛 Kerala Consumer Commission Orders Bank to Compensate Dairy Farmer Over Lost NABARD Subsidy
A Kerala District Consumer Disputes Redressal Commission has directed Federal Bank to pay ₹1.76 lakh to a dairy farmer after ruling that the bank’s procedural lapses deprived him of a government subsidy under the NABARD Dairy Entrepreneurship Development Scheme (DEDS).
The decision reinforces the responsibility of financial institutions to properly process government-backed subsidy applications and protect the interests of farmers.
🐄 Loan Sanctioned Under Dairy Entrepreneurship Development Scheme
In 2017, dairy farmer James Thomas from Kasaragod approached Federal Bank after learning about the NABARD Dairy Entrepreneurship Development Scheme (DEDS), which offered a 25% capital subsidy for eligible dairy farming projects.
The bank sanctioned an agricultural loan of ₹3.75 lakh in December 2017, which was disbursed in February 2018 for purchasing five cows and constructing a cowshed. According to the farmer, the bank assured him that he would receive a ₹1.26 lakh subsidy under the scheme.
James Thomas invested the loan as intended, expanded his dairy enterprise, and continued repaying the loan. However, the promised subsidy never reached him.
📄 Commission Finds Bank Failed to Follow Procedure
Federal Bank argued that it had initially submitted the subsidy application to NABARD but later needed to reapply through the ENSURE online portal, by which time the allocated funds had been exhausted.
However, the Consumer Commission observed that the ENSURE portal had already been operational before the loan was sanctioned, meaning the bank should have submitted the application through the correct online system from the beginning.
The Commission further noted that the bank failed to provide documentary evidence proving it had resubmitted the application online.
📑 NABARD Letter Strengthened Farmer’s Case
A letter issued by NABARD in July 2025 revealed that the organisation had requested Federal Bank to provide details of the online subsidy application but had not received the required information.
Based on the available evidence, the Commission concluded that the farmer was denied the subsidy solely because of the bank’s procedural negligence rather than a shortage of government funds.
⚖️ Compensation Awarded
The Commission directed Federal Bank to pay:
- 💰 ₹1,26,500 towards the subsidy amount
- 🤝 ₹50,000 as compensation for mental agony and hardship
The total compensation awarded amounts to ₹1,76,500.
The bank has been instructed to comply within one month, failing which the awarded amount will attract 12% annual interest until payment is made.
🌾 Strengthening Accountability in Agricultural Finance
The ruling highlights the importance of accurate documentation and timely processing of government-supported agricultural schemes. It also reinforces consumer protection for dairy farmers who depend on institutional finance and public subsidy programmes to expand their livestock businesses.