Karnataka looks to banks to fight agrarian crisis

Banks have now been told to “provide relief measure through rescheduling existing loans and to sanction fresh loans”.
The government has urged bankers to render assistance to farmers  | Express
The government has urged bankers to render assistance to farmers | Express

BENGALURU: With different parts of the state suffering from floods and droughts even before farmers could benefit from the state governments’ loan waiver, banks have now been told to “provide relief measure through rescheduling existing loans and to sanction fresh loans”.

In a letter by Gangaram Baderiya, Principal Secretary of Revenue Department, written on Saturday, to scheduled commercial banks including small financial banks, he has highlighted that droughts and floods were widespread in the state. “(sic) The state government has notified 45 taluks of eight districts as flood affected taluks and 100 taluks of 24 districts as drought affected talukas, i.e., 142 talukas out of 176 talukas in the state are affected by natural calamities,” he wrote in the letter, noting the agrarian crisis in the state.

As per Master Direction – Reserve Bank of India (Relief Measures by banks in areas affected by Natural Calamities) Direction 2017, Baderiya pointed out that the role of scheduled commercial banks including small financial banks, was to provide relief measures. This was achieved by rescheduling exit loans and sanctioning fresh loans based on the requirement of borrowers who have suffered crop losses of 33 per cent or more in the area they are cultivating.

Requests

Considering the situation in the state, Baderiya has urged bankers to render assistance to farmers. Postponement of recovery measure for at least three months from the farmers, extending the moratorium up to one year, conversion of crop loans into term loans for a period of five years and extending fresh loans are among the requests made by the state. 

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