The Kerala Gramin Bank (KGB), one of the most successful regional rural banks in the country, has temporarily shut down its branch at Irulam in Kerala’s Wayanad district following the agitation by a local farmers’ group after the arrest of a defaulting borrower.

The bank authorities, on the advice of the Wayanad district administration, decided not to open the Irulam branch until after November 7 when the results of the local body elections in the State will be announced. “Even if we open after November 7, we cannot work without police security,” Babu Mayilampadi, manager of the branch, told BusinessLine . The KGB, which is sponsored by Canara Bank, has three other branches in the Poothaadi gram panchayat area, apart from the Irulam branch.

The branch has been closed since Saturday. The previous evening, a group of activists of the Farmers’ Relief Forum had laid siege to the bank and prevented the staff from leaving after a magistrate’s court sent a defaulting borrower to two weeks’ judicial custody. “The agitators detained the staff from 4.30 pm to 2.30 am,” Mayilampadi said. “We were released by the police and the administration officials hours after midnight.”

Coffee prices crash Sukumaran, a hill produce merchant, had taken a business loan of ₹90,000 way back in 1999, offering the collateral security of 75 cents of land. In the wake of the price crash of agricultural produces, particularly coffee, which had started in Wayanad more than a decade ago and which had triggered a wave of farmer suicides, Sukumaran’s business collapsed.

He could not repay the loan and hence the bank attached his property. “The property was put on auction twice, but there were no takers because of local resistance,” Mayilampadi said. Finally, a court ordered his arrest and on Friday last Sukumaran surrendered at the court, which sent him to a fortnight’s judicial custody. Soon after he was sent to the Sulthan Batheri jail, activists of the FRF rushed to the bank and held the staff “hostage”. The agitation was supported by the Kerala Karshaka Sangham, the farmers’ wing of the CPI(M) .

“Why should the bank get the poor borrower arrested and sent to jail even though the bank already has attached his property, which is worth much more than the ₹5.75 lakh he owes to the bank?” wondered P Krishna Prasad, former CPI(M) MLA and leader of Karshaka Sangham.

He also alleged that the bank had told the court that the property fell in the ‘tiger protection zone’ so that people wouldn’t buy it. “We want the bank to withdraw its execution petition from the court so that Sukumaran can be released from jail,” he told BusinessLine . “The authorities should take action against the bank for misleading the court about the ‘tiger protection zone’ which hurts the interests of local farmers.”

Issue ‘politicised’ Mayilampadi, however, alleged that the whole issue was politicised. The bank had earlier been willing for a partial write-off and the borrower was ready to pay up a large portion. But the “intervention by politicians” fouled up the issue.

Meanwhile, the Wayanad District Collector has called the agitators for negotiations on Wednesday. But, reopening of the bank would be possible only after November 7. Mayilampadi is afraid that Maoists might now take up the issue and hence without police protection the staff would be scared to work at the branch. A few years back, in the thick of the agrarian crisis, another branch of the bank, at nearby Padichira, had been vandalised by an extremist group, he recalled.

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