Rs. 252-cr. interest on loans to farmers waived

By Our Special Correspondent

BANGALORE, JUNE 28. The State Government has decided to waive Rs. 252 crores in interest on loans availed of by farmers from the Karnataka State Cooperative Agricultural and Rural Development Bank.

The decision, which came into effect on June 27, is likely to benefit three lakh farmers who have availed of long-term loans, but have not been able to repay them.

The Minister for Cooperation, Mr. D.K. Shivakumar, told presspersons here on Thursday that the one-time-settlement policy announced by the Government would be in force for a month from Wednesday.

He said following the decision, the compound interest and continuing interest on loans taken by farmers would not be charged. But they would have to repay the principal loan amount with simple interest. The scheme did not cover those who had taken loans following loss of crops or for digging wells, he added.

Mr. Shivakumar said the decision was taken on the lines suggested by the NABARD.

Giving details of the outstanding loans availed of by farmers from the Karnataka State Cooperative Agriculture and Rural Development Bank since 1980, Mr. Shivakumar said the total loans were in the order of Rs. 1,031.38 crores, including simple interest, continuing interest and compound interest. The new policy aimed at waiving Rs. 252 crores, which included continuing interest and compound interest amounting to Rs. 238 crores, and other expenses amounting to Rs. 14 crores. The policy covered about three lakh farmers who had taken loans up to Rs. 5 lakhs.

He said of the total 177 primary land development banks in the State, only 47 banks were making profits. They were, therefore, in a position to give loans.

Mr. Shivakumar said he hoped farmers would make use of the opportunity to repay loans and avail of fresh loans. He said the documents mortgaged would be released soon after they repaid the loans.

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