Karnataka Farm Loan Waiver Scheme to Waive off Nationalised Bank Loans of Farmers

Dated: August 25, 2018 | Updated On: December 17, 2018 | By: Karan Chhabra |
Karnataka Farm Loan Waiver Scheme to Waive off Nationalised Bank Loans of Farmers

Karnataka govt. has cleared the plan for Farm Loan Waiver Scheme to waive off Nationalised Banks Loans of Farmers. Under this scheme, all crop loans of the farmers taken from nationalized banks will be waived. Even the farmers who have repaid loans on time will get incentives. The state govt. will provide Rs. 30,160 crore to the banks including Rs. 7,419 crore interest to benefit around 23 lakh loan bank account holders.

With all the nationalized banks refusing to accept the zero interest bonds or waiver of interest on current loans, the state govt. expects an additional burden of Rs. 30,160 crore to waive off crop loans. Moreover, all the banks have agreed to accept payment in installments but with interest calculated for all 4 years over which the loan reimbursement will be spread.

After the CM H.D. Kumaraswamy meeting with banks official on 25 August 2018, it is decided that banks are ready to issue “No-Debt Certificate” to farmers immediately.

Karnataka Farm Loan Waiver Scheme for Nationalised Bank Loans

As per the official statement said “We have decided on the quantum to be set aside for Karnataka Farm Loan Waiver Scheme for Nationalised Bank loans over the next 4 years. Total loans from nationalised banks are to the tune of Rs. 30,160 crore. This is apart from the loans availed from co-operative banks. All put together, the waiver package is worth Rs. 42,000 to 43,000 crore”.

The interest alone on the total waiver will run upto Rs. 7,419 crore. The govt. intends to repay the loans from budgetary allocations. Karnataka govt. will make repayment in less than 4 years. Now the farmers will not have to deal with banks anymore. Now it is only between banks and the state government. Farmers can now avail fresh loans from banks.

This move will benefit 16.94 lakh loan account holders in addition to 6.23 lakh account holders who will receive incentives for having their repaid loans. The plan is to waive off loans of farmers from nationalised banks and incentivise account holders to benefit 23 lakh loan account holders.

Karnataka Crop Loan Waiver Scheme Nationalised Banks

Karnataka Crop Loan Waiver Scheme Nationalised Banks

While 30,163 crore is the estimated amount including the interest for the next 4 years. But 2 IAS officers who have been appointed as nodal officers will work out the actual cost to the govt. after consultation with the banks. These officials will also ensure that the loan waiver scheme only benefits the farmers and neither the banks nor the middlemen.

Finance Dept is soon going to issue a government order for Farm Loan Waiver Scheme. After this notification, farmers are likely to get “No-Debt Certificates” from banks which will make them eligible for fresh loans.

Nationalised Bank Loans Farmers Waived Karnataka

Nationalised Bank Loans Farmers Waived Karnataka

When Banks will be Paid Back

The state govt. will make payments to the banks in the next 4 years. The amount to be paid is shown in the table below:-

Financial Year Amount
2018-19 Rs. 6500 crore
2019-20 Rs. 8656 crore
2020-21 Rs. 7621 crore
2021-22 Rs. 7131 crore

Previously, the state govt. has waived off the crop loans of farmers from Regional Rural Banks, Co-operative banks.
Also ReadMP Farm Loan Waiver Scheme

Now the state govt. has waived off the loans from nationalized banks also to complete the farm loan waiver process. From today onward, any bank cannot harass farmers for the loan amount as it was promised during elections.

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