Karnataka orders banks to waive crop loans: Official
Thursday - June 13, 2019 5:58 pm , Category : BUSINESS
Bengaluru, June 13 (IANS) Amid conflicting reports banks withdrawing the money deposited earlier in farmers accounts after the recent general elections, the Karnataka government has ordered the waiver of all crop loans farmers borrowed from state-run banks, an official said on Thursday."The revenue department has directed the commercial banks to waive loans farmers borrowed to buy seeds and fertilisers for growing various crops but could not due to severe drought last year," the official told IANS here.In line with the promises to write-off farm loans made by the ruling Janata Dal-Secular (JD-S) and Congress allies in their poll manifestos before the state assembly elections in May 2018, Chief Minister H.D. Kumaraswamy also told the banks to restructure the loans to enable the farmers borrow money for sowing operations in the kharif season this year."The loans include Rs 2,812 crore restructured, Rs 3,067 crore overdue and Rs 720 crore incentive for regular loans in the public sector banks," the official said, citing the government order to the banks.The state government will compensate the banks from its resources for waiving the farm loans, including borrowings from the state-run National Bank for Agriculture and Rural Development (Nabard).The year-old coalition government has compensated the state-run banks by paying them Rs 3,930 crore for waiving loans of 7.49 lakh accounts, and Rs 4,830 crore to co-operative banks for writing off crop loans of 11.20 lakh accounts."The state government is, however, yet to decide on 1.08 lakh crop loans worth Rs 965 crore which turned into non-performing assets (NPAs) due to default on payment of capital and interest by a section of farmers over a period of time," said the official.Clarifying that owing to wrong listing of re-structured loans of some farmers as regular accounts, the banks have withdrawn the amounts credited to their accounts before the Lok Sabha elections in April-May."The Chief Minister has called for a meeting with the state-level bankers' committee officials on Friday to streamline the crop loans and protect nearly 14,000 farmers in the state's northern districts like Yadgir, Ballari, Koppal, Raichur and Kalaburagi from the debt burden," the official added.