Banks waive Rs 438 cr in debt-stressed districts

Commercial banks in Karnataka have waived Rs 438.40 crore and regional rural banks (RRBs) Rs 74.62 crore of 192,000 and 52,000 overdue accounts respectively as part of the Prime Minister’s relief package to six debt-stressed districts in the state.

The entire interest on overdue agricultural loans as on July 1, 2006, has been waived by banks besides rescheduling the principal amount and extending fresh loans to eligible farmers. RRBs and state cooperative banks were asked to submit the claims to Nabard and commercial banks to RBI for reimbursement.

According to information available with state level bankers’ committee (SLBC), the state government, in April 2008 released Rs 248.48 crore to RBI and Nabard towards part of a 50 per cent share pertaining to commercial banks (Rs 214.33 crore) and RRBs (Rs 34.15 crore) excluding cooperative banks.

Of the Rs 248.48 crore released by the state government in two instalments to RBI and Nabard, a sum of Rs 212.08 crore has been paid to commercial banks and Rs 2.24 crore to urban cooperative banks and Rs 34.15 crore to RRBs.

The prime minister’s relief package was launched for three years, starting 2006-07 for six debt-stressed districts of Belgaum, Chikmagalur, Chitradurga, Hassan, Kodagu and Shimoga. These districts had reported high incidences of farmers’ suicides in Karnataka.

The departments involved in organising the package are agriculture, major and medium irrigation, water resource, watershed development, horticulture, animal husbandry and fisheries. The budget provision of Rs 2,689.64 crore was allocated for three years. Of this, up to October-end 2008, Rs 2,001.79 crore has been spent.

Further, the relief package has been extended up to September 2011. Considering the reports submitted by different departments up to the end of October 2008, the Centre has released only Rs 1,070 crore.