BENGALURU: Three weeks after announcing a partial crop loan waiver, H D Kumaraswamy’s government finally has the backing it needs from commercial and nationalised banks. In a meeting with State Level Bankers Committee on Tuesday, the government managed to convince banks to accept reimbursement of the loan waiver in four instalments. Two sub-committees of bankers and government representatives have been formed to work out the modalities and grounds of agreements.
While banks are willing to accept reimbursement in instalments, but whether it will be in the form of ‘government guarantees’ or a more conventional ‘zero interest bonds’, will be decided by the first sub-committee. The sub-committee will have members of all 15 member-banks and government officials to chalk out ways to implement the farm loan waiver. The committee will be responsible for data collection, estimation of total loan accounts and exact cost of waiver, cross-verification with Aadhaar seeding, income tax returns, survey number compatibility, filtering duplication of loan accounts, duplicate claims, etc to arrive at the exact number of beneficiaries. “All the information compiled by the subcommittee in a common format will be uploaded on a software called ‘Loan Waiver’. If data is compatible, the account will be considered for the waiver,” said a source present in the meeting adding that the entire process is expected to take at least 45 days.
The second sub-committee- with members of three commercial banks and chiefs of Regional Rural Banks (RRB) has been specially formed to ensure economic sustainability of RRBs seeded to lead banks like Canara, SBI and Syndicate bank.
“Banks have provisions to write off interest and principal amounts up to 100 per cent on loan declared as NPAs but if the same yardstick is applied to RRBs, they will land in a mess due to capital erosion. This sub-committee will look into how RRBs burden can be shared between the government and the seeding bank,” the source said.
“Total loan of `37,159 crore from nationalised banks, `9,448 crore fresh running loans, incentive for loan accounts, pending reimbursement of `4,000 crore for waiver announced by the previous government comes up to about `48,000 crore,” H D Kumaraswamy said. The government hopes to clear the first set of papers on the waiver by October this year.