The Hindu Business Line : WBSCB to waive penal interest imposed on farmers

Kolkata, Jan. 8 The West Bengal State Cooperative Bank (WBSCB) has decided to waive an estimated Rs 15-16 crore of penal interest slapped on about four lakh borrowers, all farmers. “We’ve no other option but to announce waiver if we have to retain these farmers under the ambit of short-term co-operative credit structures,” Mr Samir Ghosh, Chairman of WBSCB, told Business Line here on Thursday.

These four lakh farmers, with earlier records of good repayments, have now become a disgruntled lot and therefore defaulters as they have been denied the benefit under the Union Government’s Agriculture Debt Waiver and Debt Relief Scheme 2008. They took loans from the short-term co-operative credit structures on or after April 1, 2007. The cut-off date being March 31, 2007, these farmers were not eligible for waiver under the scheme. They were hoping that the provisions of the scheme would be extended to cover them but that did not happen. Capping it all, there was campaign against repayments.

As a cumulative effect of all this, they stopped making repayments and thus became defaulters.

Since they stopped making repayments, the penal interest started accumulating on their loans whose repayments have become overdue. The chance of recovery would further recede if the full repayment, i.e, both normal and penal interests, was insisted upon, Mr Ghosh said. Instead, it was felt that the short-term cooperative credit structures must stand by them. The decision therefore was taken to waive the penal interest so that they could pay their normal dues. For rabi crop loans 2007-08, the last date for repayment had been extended from December 31, 2008 to January 31 to enable them to complete the sale of their present crops and clear the dues.

For the kharif crop loans 2007, the last date for repayment had been set at March 31, 2009. “Once they make repayments, they will become eligible for fresh loans,” Mr Ghosh added.

More Stories on : Co-operatives | Agricultural Policy | West Bengal

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