The Hindu : Karnataka / Bangalore News : Cooperative banks will get Rs. 274 crores: Yediyurappa

Online edition of India's National Newspaper
Wednesday, Feb 22, 2006

Karnataka

Karnataka - Bangalore

Cooperative banks will get Rs. 274 crores: Yediyurappa

Special Correspondent

DISCUSSION: Deputy Chief Minister B.S. Yediyurappa at a meeting with Apex Bank president M.N. Rajendra Kumar (third from left) and district directors in Bangalore on Tuesday. — Photo: V. Sreenivasa Murthy

BANGALORE: The Government is said to have decided to release dues of Rs. 274 crores to district cooperative banks to compensate them for the waiver of interest on farm loans and grant of loans at six per cent interest.

Deputy Chief Minister B.S. Yediyurappa, who also holds the Finance portfolio, held a meeting with President of the Karnataka State Cooperative Apex Bank Limited M.N. Rajendra Kumar, Vice-President S.L. Dharme Gowda and directors, and reviewed the functioning of cooperative banks.

On Tuesday, addressing presspersons after the meeting, Mr. Rajendra Kumar said the Government has not released dues of Rs. 703.12 crores to cooperative banks. The banks are facing financial constraints because of the waiver of interest on crop loans and distribution of loans at six per cent rate of interest. Mr. Yediyurappa agreed to release Rs. 274 crores before March-end, he said. The Government has to refinance cooperative banks on account of the waiver of interest and penal interest during 2005-06 to the extent of Rs. 545 crores and Rs. 124 crores, respectively. The Dharwad District Cooperative Central Bank has sought Rs. 25 crores from the Government under the revival plan. But only Rs. 6.25 crores has been sanctioned, Mr. Kumar said. Under the "Dam Duppat" plan (applicable to cases where the accumulated interest is more than the principal amount), district cooperative banks sought Rs. 4.43 crores but the Government has released Rs. 1.03 crore, Mr. Kumar said.

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