State government owes about 3,000 cr to different banks for crop loan scheme

Guntur: The state government is yet to reimburse the subsidy to the banks which have been providing interest free crop loans up to Rs 1 lakh and Pavala Vaddi loans up to Rs 3 lakh to the farmers. The reimbursement to banks is due ever since the government began implementation of crop loan waiver scheme.

Govt needs to provide reimbursement to banks for interest subsidy given since 2013-14

s a result, some banks are issuing notices to the farmers who have taken crop loans to repay the loans with interest.The banks are charging 7 per cent interest for first year, 9 per cent for second year and they are charging interest on par with other loans.The farmers are going into a state of shock when they are getting phone calls from banks seeking repayment of loans with interest.

V V Lakshmi who has taken crop loan from the Indian Bank, said, the bank officials telephoned and asked her to pay 9 per cent interest as early as possible. She said the banks officials informed that they were not getting interest subsidy reimbursement from the government. That is why they are asking to pay with the interest. She pointed out that interest free loans were announced up to Rs 1 lakh.

She said she has taken loan to meet agriculture expenses. Lakshmi said it is difficult to pay interest for crop loans.An official in the Indian Bank on the condition of anonymity informed that the government is not reimbursing interest subsidy to the bank for the last three years. That is why they were collecting crop loans amount with interest. Highly placed sources in the Andhra Bank informed that seven banks were collecting interest for Rs 1 lakh crop loans also.

When the government will reimburse the crop loans to the banks, they will credit the subsidy amount to the account of farmers’ concerned. Seven banks are collecting full amount with interest from the farmers, after getting subsidy reimbursement from the government, they will credit the interest subsidy to the farmers. But twenty nationalised managements decided not to impose financial burden on the farmers. Though the government is not reimbursing the interest subsidy, the banks are not collecting interest from farmers.

The banks will get interest subsidy amount, when the government releases the subsidy. The bank managements have been submitting the statements for interest subsidy for every six months. But they have not secured interest subsidy since 2013-14. The banks are losing interest on this amount. “If the government releases the amount, we will sanction loans to other farmers. The government has to reimburse more than Rs 200 crore interest subsidy to the Andhra Bank. Similarly, it has to reimburse, more than Rs 3,000 crore to various banks.

Some bank officials are feeling that it will become NPA after some time,” an official said. CPI state assistant secretary Muppalla Nageswara Rao said, "It is not correct to create inconvenience to the farmers who have taken crop loans from the bankers. It is responsibility of the government to release subsidy to the banks to sanction crop loans without interest. I am demanding that the government make an official statement on subsidy released to banks to sanction interest free loans to the banks.

”Guntur district lead bank manager M. Sudarshan Rao said, "Seven banks including Indian Bank are collecting interest on the crop loans even up to Rs 1 lakh. When the government reimburses the interest subsidy to the banks, they will credit the amount to the farmers' account. Remaining banks are not collecting the interest on crop loans up to Rs 1 lakh from the farmers with an aim of not imposing burden on the farmers."

By V L Syam Sundar