Fully reimburse farm loans, bankers tell AP govt

• TDP government offers to pay 20 per cent of amount lent to farmers
• Ministers worried over possible confrontation with the Opposition and people over the issue at Janmabhoomi programmes
• Insurance companies too reject suggestion for extension of duration of crop insurance up to Oct 31

Hyderabad: The State Level Bankers Committee here on Tuesday was non- committal about the offer made by the State government to repay 20 per cent of the loans borrowed by the farmers as part of the farm loan waiver package. The bankers had an interactive session with the Ministers of Finance and Agriculture on the issue in the presence of senior officials in the Andhra Bank headquarters premises here.

The meeting was held in the run up to the grama sabhas (village council meetings and Janmabhoomi programmes, slated to begin from October 2. The YRSCP, Left parties and Congress threatened to raise the subject of loan waiver at these programmes.

Against this backdrop, the State government on Monday announced it would set up Farmers’ Empowerment Corporation for providing debt relief up to Rs 1.5 lakh to each farmer in the family with an initial corpus fund of Rs 7,000. The government had allocated Rs 5,000 crore in the budget towards the loan waiver and pooled another Rs 2,000.
The Executive Director of Andhra Bank S K Karla, in his address, said the farmers became “wilful defaulters” after the TDP announced the loan waiver scheme. Even those borrowed term loans and high end borrowers too were reluctant to repay the loans.

“This has been affecting the credit rating of the banks as the agriculture loans were slipping into NPA accounts,” he said. Karla suggested to the AP government that a second Debts Recovery Tribunal be set up to speed up recovery process in high volume loans and clear huge pending cases.

Finance MinisterYanamala Ramakrishnudu said the decision of the SLBC would be discussed at the cabinet meeting on Wednesday and a final decision would be taken on the loan waiver scheme after a thorough discussion.

The Minister expressed displeasure over the disbursal of the kharif loans, which, he said, was only 38 per cent, the lowest ever recorded. He said data from the banks revealed aberrations in the credit disbursement. The Minister suggested issuance of loans for the Rabi season.

The Insurance companies had rejected the suggestion that the duration for the crop loan insurance may be extended up to October 31 during this kharif season. The Insurance Company officials said they had already extended the duration of the crop loans by 45 days and further extension cannot be done.