The South Canara District Central Cooperative (SCDCC) Bank has urged the Karnataka government to reimburse the financial institutions with the amount that will be waived under the government’s proposed agricultural loan waiver scheme.

Chief Minister HD Kumaraswamy had a round of discussions with farmers’ representatives on loan waiver on Wednesday.

Addressing presspersons in Mangaluru on Thursday, MN Rajendra Kumar, president of SCDCC Bank, said that his bank welcomed the proposal. However, the failure to reimburse the amount thus waived immediately will affect the lending institutions in the State.

Farmers need loans for farming operations during the agricultural season, and the failure to reimburse the amount to lending institutions will affect both farmers and the lending institutions, he said.

Earlier scheme

Referring to the earlier loan waiver scheme of the previous Congress government, Kumar said SCDCC Bank had received around ₹180 crore of the ₹380 crore due from the State government. SCDCC Bank’s loan exposure to farming sector is through 176 PACS (primary agricultural credit cooperative societies) in Dakshina Kannada and Udupi districts of Karnataka.

Kumar also urged the Chief Minister to reconsider the proposal to exclude the directors of PACS from the loan waiver scheme. He said that the directors of the PACS are also farmers from the villages concerned. They can become directors of PACS, only if they are farmers. Any move to exclude them will affect such farmers, he said.

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