After the Punjab government announced a debt waiver for the farming sector, growers in several parts of the state have stopped repayment of bank loans in anticipation of relief.
“We have witnessed about 60 per cent drop in repayment of farm loans as accounts are turning irregular,” Punjab State Level Bankers Committee (SLBC) Convenor and Punjab National Bank General Manager (Punjab) P S Chauhan said on Thursday. “It is happening as farmers are waiting for debt waiver implementation,” he said. Because of accounts turning irregular, banks have stopped fresh lending in such accounts.
“In accounts which have become irregular, we are not making any enhancement in such loan accounts. For example, if a defaulting farmer wants enhancement of Rs 1 lakh in his loan account, we are not allowing this,” he said.
To speed up recoveries, banks are warning growers that they would not get interest subvention in crop loan if they fail to repay loans.
“There will be no interest subvention of 3 per cent available to farmers if he does not repay loan. Moreover he will also not be eligible for fresh lending,” he said.
Not only in commercial banks, the recovery of loans has been hit in case of cooperative banks as well, the official said. A loan of Rs 3,600 crore was yet to be recovered from farmers who borrowed from cooperative banks.
As part of the debt-waiver plan, the Punjab government had last month announced the full waiver of crop loans up to
Rs 2 lakh for small and marginal farmers (up to 5 acres), and a flat Rs 2 lakh relief for all other marginal farmers.
 "debt, loan, depression, interest, tax, worried, loss, profit")