Govt will have to act if banks refuse loans to eligible farmers: CM Devendra Fadnavis

Earlier, the state government lodged FIRs against 16 banks who failed to disburse loans.

Written by Shubhangi Khapre | Mumbai | Published: July 25, 2015 1:47:43 am
Devendra Fadnavis, CM Devendra Fadnavis, farmer, farmer loan, crop loan, mumbai news, Indian Express The total number of farmers who have borrowed from banks in the 18 districts of Vidarbha and Marathwada together have crossed 14.5 lakh compared to 9.5 lakh last year. ( Express Photo)

The state government has decided to continue cracking the whip against financial institutions that refuse to extend crop loans to deserving farmers in violation of norms even as the Union finance ministry has not approved of the earlier FIRs lodged against some banks.

Chief Minister Devendra Fadnavis told The Indian Express, “At the outset let me make it clear that government is not on a spree to file FIR against any and every bank across Maharashtra. But we will certainly act where things are going absolutely wrong and farmers are suffering. I cannot remain a silent spectator when my farmers are in pain.”

Earlier, the state government lodged FIRs against 16 banks who failed to disburse loans. In a letter written on July 8, financial services secretary Hasmukh Adhia wrote to state chief secretary Swadheen Khstriya to stop filing FIR against nationalised banks refusing loans to farmers. “Taking criminal action against banks would be catastrophic and not help in achieving the purpose,” the letter read.

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“Such decisions could become counterproductive as employees of bank would not cooperate with government which could have unintended consequences,” the letter said.

Responding to the Centre’s warning, Fadnavis said, “I want to place things in the right perspective as the Opposition has raised a hue and cry on the matter without taking the right context. The state government cannot overlook the interests of the farmers. If those who are eligible are seeking loans it is mandatory for financial institutions to consider their cases on humanitarian grounds.”

Fadnavis said, “We have not initiated any campaign against banks nor filed FIR against anybody and everybody. In most cases only notices have been served. I held several meetings with the banks and discussed how to go about to tackle the agrarian crisis. The Union Ministries of Finance and Agriculture has also been extremely supportive to state in tackling the crisis.”

While acknowledging that government is seized of the pressure on banks which avoid bad debt, Fadnavis said, “To find a solution we have agreed to become the guarantor. The process of restructuring of loans was to wipe out the debt in the first year of seeking loan to make larger number of farmers eligible for loans. Now we have got rid of interest rates for all five years.”

The state government’s initiatives coupled with the FIR threat has resulted in a rise in total loans disbursed to farmers, which now stands at Rs 17,317 crore as on July 15, which is Rs 4,230 crore higher compared to last year.

The total number of farmers who have borrowed from banks in the 18 districts of Vidarbha and Marathwada together have crossed 14.5 lakh compared to 9.5 lakh last year.

Revenue and Agriculture Minister Eknath Khadse said, “The state government has the right to act against banks refusing loans. What ever decisions have been taken are within the given jurisdiction of the laid norms.”

While ruling out any conflict between the state and Centre, Khadse said, “The decision to initiate action against some institutions which faulted was to send a strong message across. We have to ensure banks cannot avoid loans to deserving farmers.”

Sources in the state finance ministry said, “It is a fact that banks are not willing to lend to farmers because of bad debt. The average lending is only 35-40 per cent.”

Compared to this the lending for non-agriculture loans is 300 times more.

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