The Hindu Business Line : Chidambaram walks the talk on loan waiver monitoring

Bangalore, June 16 First, it was the public sector bank Chief Executive Officers’ turn to inspect how branches have complied with the farm loan waiver scheme. Today, it was the turn of the Finance Minister Mr P. Chidambaram himself to monitor compliance.

The Minister inspected the books of some branches during the last few days. Among the banks inspected were the rural offices of the public sector Vijaya Bank and Canara Bank.

Happy with progress

Mr Chidambaram said he was satisfied with the progress of the banks in meeting the June 30 deadline.

The officers involved in implementing the scheme were subjected to close questioning by the Minister. Mr Chidambaram said, “I have inspected the books and discussed the calculations.”

He said that both Canara Bank and Vijaya Bank would be in a position to publish the list of farmers eligible for the waiver, well ahead of the deadline.

Lists by June 23

The Chairmen and Managing Directors of both banks, Mr M.B.N. Rao and Mr Prakash Mallya respectively, said that the lists would be published by June 23.

“No eligible farmer would be left out of the scheme,” the Finance minister said. However, he added, “No ineligible farmer will be included in the scheme.”

write-offs, rescheduling

The scheme involved both write-offs and rescheduling of overdue loans on farm advances disbursed between March-end 1997 and March-end 2007. Only those loans that remained overdue till December 2007 would be eligible for the waiver scheme.

Vijaya Bank has already assessed the impact at Rs 313.69 crore. Canara Bank officials, however, said that they were still assessing the impact of the loan waiver scheme. The bank has appointed about 600 inspectors, overseen by another 200 executives for finalising the amount, under both the waiver and the one-time settlement scheme. The official said that the list would be ready by June 24, well ahead of the deadline.

The Finance Minister also insisted on the appointment of grievance redressal officers for settlement of disputes. Speaking to a cross-section of farmers at Canara Bank’s Avathi branch in Bangalore Rural district, Mr Chidambaram said the officers would settle the disputes within 30 days. But, he emphasised, “the decision of the officers would be final.”

‘for sick children’

Answering questions from journalists, Mr Chidambaram said that the fiscal impact of Rs 71,600 crore had already been factored in. Consequently there was little risk of fiscal slippage. Asked about the impact of the loan waiver scheme on farm advances that have seen high recovery levels, Mr Chidambaram said, “The farm loan scheme is for sick children. I am glad that there are healthy children.” This clearly implied that farmers who have regularly repaid their loans were unlikely to be rewarded.

In fact, both the banks have high recovery rates on farm advances, in excess of 90 per cent. Officials of the banks said the farm advances in the north, west and south have traditionally remained high recovery regions. It was only the eastern region that faced problems almost entirely on account of natural calamities.

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