BENGALURU: The Karnataka government on Wednesday decided to settle all existing dues of farm loan waiver in commercial banks at one shot. Of the Rs 2,812 crore in restructured loans eligible for a waiver, Rs 3,057 crore in overdue loans eligible and Rs 720 crore regular loans eligible for a waiver in commercial banks, the government that has already made payments of Rs 3,930 crore, will make one shot payment of all pending instalments. The move will cost the exchequer Rs 1,400 crores at once.
So far, under all three category of loans, the state has waived off loans of 7.49 lakh farm loan account holders in commercial banks. Wednesday’s decision will take the number of beneficiaries to 7.5 lakh.
“After the government order, Rs 1,400 crores pending repayments to commercial banks under three categories has already been disbursed and will reach banks in a couple of days.
This, however, does not mean it is the closure of the scheme. It is just that we are in a position to make the full payment immediately. But, if and when any fresh applications that are eligible come in, we will offer the waiver,” clarified Munish Moudgil, Commissioner, Survey, Settlement and Land Records.
Wednesday’s order, however, does not cover non-performing asset (NPA) loans eligible for a waiver. A decision over 1,08,136 NPA loan accounts that are eligible for waiver worth Rs 720 crore will be taken only after another round of discussions with commercial banks.
“Banks have offered 25% concession to NPA loans in Maharashtra but the same is not the case in Karnataka. The government is willing to pay Rs 2 lakh per family but any concession from the banks will help,” Moudgil pointed out. The government has been in talks with commercial banks for over nine months now with no consensus on NPA loans or possible concessions.
Chief Minister HD Kumaraswamy had insisted that measures would be taken to settle waiver with commercial banks much before the intended four-year period. Wednesday’s order seems to be a move towards reducing the hassles the government has been encountering with commercial banks over loan waiver.