BackNCP-controlled banks cheating farmers, says Maharashtra minister
BJP leader Subhash Deshmukh said 14 DCCBs which had accumulated huge NPAs were in deep financial trouble, stalling the implementation of the loan waiver
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Nagpur: The fight between Maharashtra’s ruling Bharatiya Janata Party (BJP) and the opposition Nationalist Congress Party (NCP) over the state’s vast cooperative sector resurfaced on Wednesday, with BJP leader and minister for co-operation Subhash Deshmukh blasting the NCP-controlled district central cooperative banks (DCCBs) for “cheating farmers and trying to exploit the farm loan waiver to clean the books".
In a scathing attack, Deshmukh, who also has stakes in the cooperative sector in Solapur district, said in the legislative assembly that around 14 DCCBs were in deep trouble due to “wrongful lending" to politically affiliated sugar cooperatives and private companies. Deshmukh defended the online application system and biometric identification used by the government to identify beneficiaries of the farm loan waiver and told the House that this procedure helped weed out a large number of ineligible accounts submitted by DCCBs.
“The online system and biometric identification have helped the state save ₹ 15,400 crore on the loan waiver which was originally supposed to cost us ₹ 34,022 crore. This is public money that we have been able to save only because we asked the farmers to file online applications and linked their bank accounts to their Aadhaar numbers," Deshmukh said.
The minister was replying to an opposition-sponsored motion on farm distress loan waiver and crop credit disbursement.
Deshmukh said 14 DCCBs which had accumulated huge non-performing assets were in deep financial trouble, stalling the implementation of the loan waiver. He cited the cases of the NCP-ruled Solapur DCCB which had lent nearly ₹ 500 crore to sugar cooperatives, Osmanabad DCCB which had issued loan worth ₹ 400 crore to two sugar co-operatives, and Nashik DCCB that had lent ₹ 185 crore to two sugar cooperatives.
“All these loans have become outstanding. These DCCBs have the money to lend to the sugar co-operatives and they have not recovered these dues. But they don’t have money to lend to the farmers," Deshmukh said.
The minister said till 10 July, DCCBs, regional rural banks, and Maharashtra Gramin Bank had issued crop credit worth ₹ 7,527 crore, ₹ 5,547 crore, and Rs.710 crore respectively to 2 million farmers.
Deshmukh argued that the data that the online system churned out gave reasons to believe that several DCCBs did not want to pass on the benefit of the loan waiver to farmers. The minister said there were major discrepancies between the number of account holders initially submitted by the DCCBs and the actual number of account holders who applied online and were identified by the biometric system. He cited data from the NCP-controlled Pune, Satara, and Solapur DCCBs.
“By October 2017, the Pune DCCB gave a figure of more than 2.20 lakh account holders but the online system revealed only 58,107 applications by farmers. Solapur DCCB claimed more than 1.33 lakh accounts but the actual number was 1.22 lakh. Satara DCCB also gave a figure of 2.32 lakh but farmers who actually applied were 2.20 lakh," Deshmukh said.
He added that when speculation over loan waiver started, the Nashik DCCB officially cited more than 319,000 farmers’ accounts but by October 2017 when the loan waiver had been announced, the system weeded out 129,000 accounts. Due to the Aadhaar linkage with bank accounts, the government was able to identify 66,333 ineligible accounts in the data submitted by the Ahmednagar DCCB, Deshmukh said.
“We were able to reduce the number of eligible account holders by more than 1.95 lakh from just two DCCBs by using the biometric system. The difference between the number of account holders initially claimed by these DCCBs and the actual number is shocking and indicates that these banks wanted to exploit the loan waiver to clean their books like they did under the 2008 and 2009 farm loan waivers," Deshmukh said. He cited the Comptroller and Auditor General’s (CAG) report on the 2008 and 2009 loan waiver announced by the then Congress-led UPA government, saying the CAG found discrepancies in 39.43% cases of which 8.5% (600,000 people) accounted for loan waiver benefits to those who were ineligible.
The biometric identification had also helped some DCCBs like Gadchiroli and Raigad, he said. “In the tribal district of Gadchiroli, Aadhar linkage has actually identified 39,808 beneficiaries when the initial number was 26,328 farmers. In Raigad also, nearly 3,000 new beneficiaries were identified," Deshmukh said. He pointed out discrepancies in the data submitted by the state level bankers committee (SLBC) in June 2017 when the loan waiver was announced. “The SLBC cited 397,979 beneficiaries submitted by five nationalised banks but after online applications were filed and biometrics was done, the number came down to 262,942 farmers. These are only representatives examples which prove that the online system has been a great success," Deshmukh said.
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