Karnataka   

Loan waiver: State seeks reimbursement

Bangalore: Union Finance Minister P. Chidambaram inaugurated the 1,000th branch of Corporation Bank at HSR Layout here on Friday. The 1001st branch at Sidlaghatta in Chickballapur district was inaugurated by Minister for Major and Medium Irrigation Basavaraj Bommai.

Congratulating the employees of the bank, Mr. Bommai pointed out that Karnataka was the home base for at least four large nationalised banks.

Referring to the farm loan waiver scheme announced in the Union Budget, Mr. Bommai urged the Centre to consider compensating the State Government for its loan waiver scheme.

He said the Karnataka Government had announced the scheme in 2007. About 12 lakh farmers had benefited from the decision, which cost the State Government Rs. 1,750 crore.

He argued that the Union Government would have had to bear this burden if the State Government had not announced the scheme before the Centre unveiled its decision in the Union Budget. He asked Mr. Chidambaram to consider reimbursing the amount the State had spent on its loan waiver scheme. He pointed out the State Government’s scheme was not confined to farmers, but also helped weavers and fisherfolk.

Mr. Chidambaram said economic growth had been “dramatic” because of the role played by the banking sector. “Growth is no longer a mantra or slogan.”

He said if the benefits of growth remained confined to the “creamy layer”, it would not be sustainable. Inclusive growth was necessary for social and economic development, he added.

Chairman and Managing Director of Corporation Bank B. Sambamurthy said the bank had opened more than 200 branches in the last two years.

Mr. Sambamurthy and Thomas Mathew, Managing Director, Life Insurance Corporation, exchanged copies of the MoUs for the master policy for micro-insurance to SHGs and weaker sections.

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