The Hindu : Karnataka / Bangalore News : Proposal on farm credit accepted

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Saturday, Dec 01, 2007
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Karnataka

Karnataka - Bangalore

Proposal on farm credit accepted

Special Correspondent

MoU to be signed with Union Government

Banks will have greater flexibility and autonomy
State to amend legislation concerned

BANGALORE: The Executive Committee, headed by Governor Rameshwar Thakur, on Friday approved a proposal to accept the recommendations of the Vaidyanathan Committee on farm credit in cooperative institutions.

Briefing presspersons on the decisions taken at the Executive Committee, Mr. Thakur said that the Government will sign a memorandum of understanding with the Union Government for implementing the recommendations in a few days.

Giving details, P.P. Prabhu, Advisor to the Governor, said that there will be a one-time cleaning up of all loans of primary land development banks.

He said that 100 per cent farm credit will be borne by the Union Government while the loans taken by farmers for constructing buildings and for doing business will be borne by the State Governments.

About the salient features of the programme, he said that the banks will have a greater flexibility and autonomy in running the administration.

The number of nominations will be reduced to one and the accounts will be audited by chartered accountants.

Chief Secretary P.B. Mahishi told The Hindu that upon signing the MoU, the State Government will have to amend legislation on the issue relaxing the powers of the State Government on nominations and investing its funds as share capital. Literally, he said, the cooperative banks will be “liberated” from the clutches of the Government.

Mr. Mahishi said that once this process was over, they will have to work as any commercial bank. All the accounts will be audited by NABARD before deciding the quantum of loans/losses incurred by the banks which have given farm credit and non-farm credit to farmers.

He said Maharashtra, Gujarat and Andhra Pradesh have implemented the Vaidyanathan Committee recommendations and utilised the facilities extended by the Union Government.

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