The Hindu : Karnataka News : Siddaramaiah turns down banks' plea for more time

Online edition of India's National Newspaper
Wednesday, Jun 22, 2005

Karnataka

Karnataka

Siddaramaiah turns down banks' plea for more time

Staff Reporter

June 30 deadline for farmers to repay loans for interest waiver

FARMERS' CASE: Officials of cooperative banks, led by the Minister for Cooperation, R.V. Deshpande (second from left), meeting the Deputy Chief Minister, Siddaramiah (left), in Bangalore on Tuesday to urge the Government to extend the deadline for farmers to repay their loans. — Photo: K. Gopinathan

BANGALORE: The Cooperation Minister, R.V. Deshpande, on Tuesday led a delegation of representatives of cooperative financial institutions to the Deputy Chief Minister, Siddaramaiah, seeking an extension of the June 30 deadline for repayment of farmers' loans and waiver of interest.

However, Mr. Siddaramaiah made it clear that it will not be possible to extend the deadline, and the farmers have to clear their dues before June 30 or forfeit the waiver of interest and penalty on short-term, medium-term and long-term loans obtained by them from cooperative banks. But he promised to call a meeting and examine the issue in detail and explore other solutions.

Mr. Deshpande said the cooperative banks are being flooded with appeals from farmers who have been repaying regularly as they feel that they are being penalised for prompt repayment. Thanks to the scheme, under which farmers were given three months' time till June 30 to repay their loans with the interest and penalty waived, district cooperative banks and regional cooperative societies have been able to recover loans from many defaulters.

`Wrong impression'

The delegation from the cooperative banks, led by the Chairman of the Karnataka State Cooperative Apex Bank, M.N. Rajendra Kumar, said many farmers were under the impression that interest would also be waived for borrowers who have been repaying their instalments promptly during the three months from April 1 to June 30. But the Government Order seems to have been issued to encourage people to default. Mr. Kumar said.

If those farmers decide to turn defaulters, the lending institutions will be faced with a difficult situation, and the process of recovery will become that much more difficult and time-consuming. He also made it clear that the farmers are not seeking extension of the deadline, but some relief in the form of interest waiver.

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