By July, 90% farm loans to be waived off in Karnataka

farmers, loan waiver, ryot

BENGALURU: Chief Minister HD Kumaraswamy’s claim that he won’t need four years to implement his massive farm loan waiver scheme may not have been far-fetched after all. Come July and most farm loans identified eligible for the waiver, in commercial banks as well as cooperative societies, will benefit out of the scheme.

Chief Secretary T M Vijay Bhaskar who spoke to the media after a meeting with representatives of commercial banks on Friday, announced that more than 90 per cent of eligible loans in commercial banks would have received the waiver by end of June and those in cooperative societies will be cleared by July. With banks agreeing to provide a rebate of 25 per cent on NPA loans, the last hurdle that the government had in implementation of the waiver was cleared on Friday.

“Banks are giving us 25 per cent rebate on NPA loans of close to one lakh farmers costing Rs 965 crore. The government will pay 75 per cent in one shot,” Bhaskar, told the media. Commercial banks’ decision to offer a 25 per cent concession comes two days after the government decided to pay all pending dues for waiver of commercial banks loans in categories of regular loans, restructured loans and overdue loans.

With this, by end of June, the government will be able to pay off waiver up to Rs 2 lakh for Rs 8.4 lakh farm loans in all commercial banks. More than one lakh farmers who hold loans in commercial banks are yet to submit details, the Bhaskar said. A rough estimate of all eligible loans in the commercial and cooperative sector has been pegged at Rs 16,000 crore. This, however, doesn’t mean the closure of the scheme. Farmers who are eligible for waiver will receive benefits as and when they submit details of Aadhaar card, Ration card and land survey documents, the officials clarified.

Waiver amount withdrawn from ineligible accounts
Responding to reports of loan waiver money disappearing from accounts of farmers from commercial banks, Bhaskar said that commercial banks had verified each loan account’s eligibility and withdrawn waiver from ineligible accounts. “Banks initially sent ineligible loan accounts too by oversight, not deliberate, but these were identified later.

Loans that were considered overdue because of non-payment of installment, accounts identified as overdue despite repayment, loans sanctioned before April 1, 2009, and accounts ineligible for incentives under the schemes were the few anomalies. But banks themselves reviewed and conducted an audit where 13,123 accounts were found to be ineligible,” Bhaskar added.