Loan recovery drive yields results in Dharwad

The drive by the Department of Cooperative Societies and KCC Bank to create awareness among farmers on the loan waiver scheme of the government has yielded good results in Dharwad district.

Led by Deputy Commissioner M S Srikar, also the administrator of the Karnataka Central Cooperative Bank (KCCB), officials of the bank and cooperation department launched a drive of village stay from May 26 to explain to farmers how to benefit from the scheme. They visited the villages, stayed there and convinced the farmers to repay loans exceeding Rs 25,000.

Deputy Registrar of Cooperative Societies Anant told Business Standard that the recovery amounted to Rs 6 crore. May 31 is the deadline for availing of the benefit under the loan waiver scheme.

The state government has announced the scheme wherein farmers who borrowed money for agriculture from January 1, 2006 to December 31, 2006 will benefit from the scheme. Under the scheme, farmers who have borrowed up to Rs 25,000 need not pay.

Those taking loans of Rs 50,000 need to repay only Rs 25,000 while the rest along with interest would be waived. The farmers who have borrowed Rs 75,000 -- Rs 1 lakh will get a relief of Rs 25,000 and they have to pay the principle amount.

The dues from the farmers upto Rs 25,000 was Rs 39.5 crore. The amount due from those availing loan over Rs 25,000 is Rs 25.25 crore and the bank was to recover Rs 19.10 crore to be eligible to get Rs 20.25 crore reimbursement from the government. Of the Rs 19.10 crore the KCC Bank has recovered Rs 17 crore till Wednesday. Anant expressed hope that the remaining farmers would come forward to repay the loan.

However, the recovery of Rs 65 crore has not happened since fiscal 2003-2004 as the farmers expected the state to announce a waiver under special package. "We expect the government to make an announcement in this regard in June. We want to take advantage of the loan waiver scheme and we are waiting," said Yallappa Patil of Uppin Betageri village.

MLC Basavaraj Bommai wrote to the chief minister urging the government to release Rs 85 crore to KCC Bank to compensate for the loan and interest-waiver.

Bommai said the KCC Bank had to suffer as the government did not release Rs 35 crore due to it as compensation for loan waiver in 2004. The government was to pay Rs 73 crore to KCC Bank but it released only Rs 37.5 crore to it, while other DCC banks received the full amount.

KCC Bank covers 1.5 lakh families of farmers and is the district central cooperative bank for Dharwad, Gadag and Haveri districts.

The urban cooperative banks attached to KCC Bank are now pressing for refund of Rs 89 crore kept as statutory liquidity ratio deposit. In the absence of this amount the urban cooperative banks will be in the red.

The KCC Bank is to recover Rs 70 crore from the institutions enjoying the patronage of politicians. The patrons of these defaulting institutions have used their clout to prevent any penal action, Bommai said and added that the property of these institutions should be attached.