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No BoM loans for drought-hit farmers: ‘Step anti-farmer, insensitive’

Farmer leaders said fresh credit seems to be a problem for farmers in various parts of the state where after two or three years of drought, very large sections of the rural population will require credit in coming weeks, in preparation for the kharif sowing season.

maharashtra, farmers, drought, maharashtra drought, maharashtra farmers, loans, farmer loans, agrarian crisis, agrarian distress, bad loans, agriculture, mumbai news, indian express news Vishwas Utagi, vice-president of All India Bank Employees Association, said while the Bank of Maharashtra’s circular is one example, other nationalised and cooperative banks are not lending to the agriculture sector either. (Representational Image)

DAYS after the Bank of Maharashtra (BoM) issued a circular instructing its branches in six drought-hit districts of Maharashtra not to issue fresh farm loans on account of the large number of bad loans in these regions, farmer leaders and unionists called it unacceptable for a state-run lender to discourage credit to farmers in areas facing extensive agrarian distress.

The circular was issued to branches in eight zones. Apart from Bhopal and Jabalpur in Madhya Pradesh, the six state districts are Akola, Amravati, Solapur, Latur, Aurangabad and Jalgaon.

Titled ‘Analysis of Agriculture Portfolio: Special Emphasis on NPAs under Agriculture’, the circular dated April 18 described the current condition of the bank’s farm loans as “pathetic”.

Gross NPAs (non-performing assets) as a percentage of total agriculture sector advances stood at 18.36 per cent at the end of 2018-19, up from 11.3 per cent as of March 31, 2017, and 15.38 per cent as of March 31, 2018. Fresh slippages stood at Rs 1,300 crore in 2018-19, up from Rs 865 crore in 2016-17 and Rs 977 crore in 2017-2018.

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Eight zones and their branches with a high percentage of agriculture sector NPAs have been identified for “curative action”, the circular said. Among the steps listed was instructions to branches where these NPAs are over 15 per cent to “not sanction new/enhancement proposals under agriculture”. Instead, genuine cases of existing borrowers with a “good track record” and new clients should be tapped and recommended to the higher authority for sanctions based on merit. These branches would, however, be able to review and renew the Maharashtra Kisan Credit Cards and sanction gold loans.

“This is absolutely insensitive, it is an anti-farmer and anti-agriculture step,” said Dr Ashok Dhawale, president of the CPI(M)-affiliated All India Kisan Sabha. He added the fact that agriculture sector NPAs have risen in 2018-19 should be seen as evidence that not enough farmers got the benefit of the Maharashtra government’s loan waiver announced late in 2017. “All these six districts are badly drought-hit areas, where farmers are in deep financial distress. This attitude of the bank should be condemned,” he said.

Other farmer leaders said fresh credit seems to be a problem for farmers in various parts of the state where after two or three years of drought, very large sections of the rural population will require credit in coming weeks, in preparation for the kharif sowing season. “What about corporate NPAs? Why go after farmers alone?” Dr Dhawale asked.

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Vishwas Utagi, vice-president of All India Bank Employees Association, said while the Bank of Maharashtra’s circular is one example, other nationalised and cooperative banks are not lending to the agriculture sector either.

“Just when the sector needs help from nationalised banks, the irony is that bankers are not in a position to lend because the NPAs are somewhere else and poor farmers are suffering. Corporate loan defaults are much higher,” he said, accusing the RBI and NABARD of not monitoring the situation adequately.

The bank, for its part has denied that there will be a curtailment of or restriction on loans to the agriculture sector. “The bank has put in guidelines to bring efficiencies and address the funding needs of farmers,” said a statement from Bank of Maharashtra, adding that while fresh loan proposals will have to be referred to the zonal offices in these districts, branches will continue to carry out conversion or reschedulement of loans.

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Zonal offices would strengthen their agri loan processing cells, the bank added. “To accelerate finance to farmers for the kharif 2019 season, Bank of Maharashtra will organise Shetkari Melavas across India,” the statement said.

“Referring a fresh loan application to a zonal office simply means it will be discouraged,” said Rajan Kshirsagar, a farmer leader in Parbhani who contested the Lok Sabha election on a CPI ticket. “These districts mentioned in the circular have had drought for consecutive years. In addition, they are all dryland farming areas. Not only is the BoM violating the RBI’s and the State Level Bankers Committee’s crop loan programme, but this systematic breaking down of institutional finance for farmers is pushing them towards private money lenders. Let us not forget that farmer suicides have grown sharply, and one of the reasons is lack of access to institutional finance,” he added.

First published on: 01-05-2019 at 03:57:05 am
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