Farm loan waiver: Karnataka in talks with Nabard to raise refinance limit

Anil Urs Bengaluru | Updated on August 13, 2018 Published on August 13, 2018

Karnataka Co-operation Minister Bandeppa Kashempur   -  K MURALI KUMAR

The Karnataka government is in talks with the National Bank for Agriculture and Rural Development (Nabard) to seek an increase in the amount of refinance to help in waiving crop loans farmers have taken from the co-operative banks in the State.

Currently, Nabard’s refinance limit is 40 per cent. The State government wants this to be hiked to 75 per cent as it will ease in implementing the farm loan waiver programme.

“When this is done, the State government may get an additional ₹4,500 crore and this can help us to waive farm loans and give relief to farmers who do not come under the ambit of co-operative banks or commercial public sector banks,” said Bandeppa Kashempur, Karnataka’s Minister for Co-operation.

“This issue has been raised with the Union Agriculture Minister, Radha Mohan Singh, and we hope to conclude on a favourable note,” he added.

At present, the Co-operation Department has an ₹11,000- crore exposure with Nabard. At 40 per cent cap, it amounts to ₹4,400 crore and when enhanced to 75 per cent the amount doubles to ₹8,250 crore.

“With the additional amount, people who are left out (cooperative institutions and public sector banks) of the current loan waiver scheme, who number 28 lakh can be helped,” Kashempur said.

The Co-operation Department has finalised the guidelines and the disbursal schedule for the loan waiver scheme. The State Cabinet on August 10 gave its approval to waive ₹9,448.61 crore farm loans in respect of cooperative banks.

As per the Cabinet approval, the waiver will be applicable to crop loans of farmers in default up to July 10, 2018. Farmers, who have repaid the loan within the time-frame, will get a credit of the repaid loan amount or ₹1 lakh, whichever is less. The amount will be transferred to the farmers’ accounts through Direct Benefit Transfer system. The scheme is likely to benefit about 20.38 lakh farmers.

As on June 30, total farm loan outstandings ofi the co-operative banks stood at ₹11,051.19 crore.

Kashempur said this loan waiver scheme will not be applicable to government or private sector employees and those earning ₹20,000 pension or salary per month, those who have paid income tax in one year during the last three years, and loans taken by mortgaging vehicles and farm equipment.

Talking about loan waiver of farmers who have taken loans from public sector banks, Kashempur said, “Chief Minister Kumaraswamy is working on the contours of the scheme. He is likely come out with a solution in 10-15 days. When announced it is likely to help 28 lakh farmers.”

“Once the details of the loans availed from public sector banks are worked out, it will be tabled at the next Cabinet meet and a suitable decision will be taken,” he added.

Published on August 13, 2018
This article is closed for comments.
Please Email the Editor