Key Points

According to the data compiled by the state cooperation department, of the Rs 37,392 crore, the district central cooperative banks (DCCBs) have yet to recover arrears of Rs 15,492 crore, nationalised banks Rs 1,800 crore, regional rural banks Rs 800 crore, and private banks Rs 3,000 crore. The increasing outstanding dues are adversely impacting the finances of these banks. Nearly 20.37 lakh bank accounts of farmers have outstanding dues.

The department sources on Thursday hinted that the arrears due to non-repayment by farmers towards crop loans, short, medium, and major loans are expected to grow further as the farmers expect an early decision on crop loan waiver. Further, the department sources said that farmers are not repaying the loans despite the appeal made by the Deputy Chief Minister, Ajit Pawar, and Agriculture Minister Manikrao Kokate to clear their dues at the earliest without waiting for the announcement of crop loan waiver.

The government, on the last day of the monsoon session on July 18, announced the establishment of a committee to look into the crop loan waiver issue and the present state of agricultural stress. Cooperation Minister Babasaheb Patil said, “The government has set up a committee to study the crop loan waiver option. It is a matter of concern that even the financially sound farmers are not repaying the loan. The financial health of district central cooperative banks, which play a major role in the rural economy, is becoming delicate. They are expected to land in big financial trouble.”

According to the cooperation department sources, crop loans worth Rs 70,000 crore on average are disbursed annually in the state. Of which, 65 per cent of loans are disbursed by nationalised banks and 35 per cent by district central cooperative banks. “Financially sound farmers with large land holdings opt for loans from the nationalised banks, while farmers having small and marginal holdings take loans from district central cooperative banks.”

Sources said that the financial condition of many district central cooperative banks, including Nashik, Wardha, and Nagpur district banks, has become fragile. Even the financially sound district central cooperative banks are likely to face similar financial problems if the arrears from farmers towards agriculture loans increase in future.

“The government provides agricultural loans at concessional interest rates. However, farmers are not in the mood to repay loans as they anxiously wait for a decision on the crop loan waiver. However, if the farmers continue to repay loans, then there is every possibility that the rural agricultural credit system may collapse,” warned sources from the cooperation department.

- IANS