COIMBATORE: Amid strong demand from farmers for a full crop loan waiver, the Registrar of Cooperative Societies (RCS) has directed cooperative societies and banks to temporarily halt recovery proceedings across the state. Societies have also been told to ensure that fresh loans are disbursed by September 30 to farmers who have fully repaid their previous loans.
In a circular issued on Monday, RCS G Latha said it had come to the government’s notice that cooperative banks and societies were taking stringent recovery measures against farmers who had received partial waiver benefits under the Crop Loan Waiver Scheme 2026 but had not fully repaid the remaining amount.
Against this backdrop, Latha directed that all recovery proceedings relating to outstanding crop loans be kept in abeyance until further instructions.
Tamil Nadu Cooperative Department data show that crop loans worth Rs 15,108 crore were issued up to December 31, 2025, while loans totalling Rs 5,932.23 crore were eligible for waiver under the 2026 scheme for loans disbursed between May 1, 2025, and February 28, 2026.
Relief likely for TN farmers facing recovery proceedings
The registrar also directed officials to ensure that farmers who have fully repaid their crop loans and have no outstanding dues are provided with fresh crop loans by September 30. The circular was issued to regional joint registrars and managing directors of district central cooperative banks.
The move follows complaints from farmers that several cooperative societies had adopted stringent recovery measures to collect outstanding dues from those who received only partial relief under the waiver scheme and subsequently defaulted on the remaining amount.
Farmers had also complained that several cooperative societies were delaying or had failed to sanction fresh crop loans for the current season even after they had cleared their previous dues in full.
The RCS referred to earlier instructions issued on July 8, 2026, while issuing the latest directions to district-level officials.
Zonal Coordinators and Managing Directors of District Central Cooperative Banks have been directed to communicate the instructions immediately to all primary cooperative societies, ensure compliance and monitor their implementation. The circular has also been marked to regional liaison officers.
Under the Crop Loan Waiver Scheme 2026, the government has waived crop loans of up to Rs 75,000, irrespective of the size of the landholding. The government has cleared loans totalling Rs 5,267 crore for 13.34 lakh farmers.
The latest directions are expected to provide relief to farmers facing recovery proceedings over partially waived loans while ensuring timely access to fresh credit for those who have cleared their previous dues ahead of the September 30 deadline.
