Banks in dilemma over farm loan waiver

Bengaluru: Even as desperate farmers continue to take their lives,  the state government doesn’t appear to have given clear instructions as yet to the banks on its promised crop loan waiver of upto Rs 1 lakh.    While banks are reported to have instructed  their field officers to put a hold on  the loan recovery process till further orders,  some farmers claim to have received recovery notices from their lending banks,  confusing and agitating them further.  According to the SLBC,  around 85 lakh farmers have borrowed Rs 1.24 lakh crore from 45 banks in the current fiscal.

"Chief Minister H D Kumaraswamy who is also the finance minister,  announced the waiver of farm loans given by all nationalised banks but has failed to explain the scheme to them. With no clarity from the government the waiver has seen no progress, " admits a senior bank official.  The mere announcement of the loan doesn’t appear to have comforted many as going by the agriculture department, 283 farmers committed suicide between April 1 and August 31, this year and another two dozen  since, taking the number of farmer deaths to over 300 in this period. 

As many as 34 farmers committed suicide in Belagavi,  21 in Vijayapura, 19 in Kalaburgi,  18 in Haveri and 17 each in Dharwad and Chikkamagaluru districts. Karnataka Sugarcane Growers’ Association president Kurubur Shanthkumar blames lack of unity on the issue between the coalition partners for the recent spate of farmer suicides.

“Farmers had expected  their loans to be waived completely once Mr Kumaraswamy became the Chief Minister,  but their hopes have been dashed by the inordinate delay. We have seen what happened during the Siddaramaiah government. It should not be allowed to happen again", he cautions.  But the banks are not acting as they are reportedly unclear how much compensation they can expect for  the waiver of loans upto Rs 1 lakh and whether the  waiver is for loans upto Rs 2 lakh or less.  “The state government has to clarify on this.  The state level bankers’ committee will take a final call once it comes out with clear guidelines on the scheme,” adds the senior bank officer.

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