Money & Banking

Maharashtra banks unable to offer fresh crop loans to defaulting farmers

Our Bureau Mumbai | Updated on June 28, 2020 Published on June 28, 2020

Banks in Maharashtra are unable to sanction fresh crop loans to some farmers as rules don’t permit them to extend fresh crop loans in cases where their existing crop loan accounts have turned non-performing, according to United Forum of Bank Unions (Maharashtra).

“The targeted groups of farmers to whom the crop loans are to be disbursed are in dire need of debt relief package from the Central/State Governments. Since their existing crop loan accounts are already non-performing assets (NPAs), Banks are unable to sanction fresh crop loan to these farmers,” said Devidas Tuljapurkar, the Forum’s Convenor for Maharashtra.

Since the farmers’ accounts continue to be NPA in bankers’ books of accounts, rules don’t permit banks to sanction fresh crop loan, he said in a letter to Maharashtra Chief Minister Uddhav Thackeray.

Tuljapurkar referred to a letter written by the State Home Minister asking all the District Collectors to register complaints against bank officials if they don’t sanction crop loans as per rules and regulations.

The UFBU Convenor emphasised that all government announcements need to be translated into proper directions by the competent authorities. In the absence of such clear directions bank officials cannot implement those announcements, he added.

“We have to bring to your notice that banks are governed by the directions issued by the Central Government which is the owner of all Public Sector Banks & regulator — Reserve Bank of India. State Level Bankers Committee also has a defined role to play in implementing the instructions and advisories of the Government.”

“...In some of the cases while sanctioning loans, bank officials are facing some technical difficulties on which solution needs to be found out by amending some of the systems & procedures by appropriate authorities. On this government should ensure that proper directions are issued to the banks by the competent authority,” said Tuljapurkar.

The letter sought to bring to the CM’s notice that almost all banks are facing acute staff shortages and thus are unable to dispose of the loan proposals faster.

Further, branches in rural areas are not getting uninterrupted power supply & BSNL connectivity and therefore branches are unable to function properly.

Published on June 28, 2020
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