Bangalore: The State Level Bankers' Committee (SLBC) for Karnataka on Thursday unanimously passed a resolution giving effect to the rescheduling of term loans amounting to Rs 1,357 crore, including the principal and interest to debt-stressed grape and pomegranate growers.
The banks have also agreed to extend fresh line of credit irrespective of the closure of the previous loan account to farmers. The bankers agreed to it after the intervention of Karnataka chief secretary Kaushik Mukherjee and minister for law T B Jayachandra at the 128th quarterly meeting of the SLBC.
Mukherjee stressed that it was not sufficient to just reschedule the loan accounts. It was important to extend a fresh line of credit so that the growers could plant these two fruits crops all over again.
Lat Krishna Rau, additional chief secretary and development commissioner, asked the banks to consider the condition as a natural calamity and extend fresh credit to farmers for taking up fresh cultivation.
The farmers across the northern districts have suffered huge losses owing to the bacterial blight disease in the pomegranate crop, and drought and floods in the grape-growing regions from 2004. It may be noted that the banks have for the past year or so been turning down requests for fresh crop and terms loans to grape, pomegranate and arecanut growers for non-repayment of their earlier loans.
"SLBC will become a talking shop if bankers continue to deny fresh loans to growers who had lost crops due to consecutive droughts and diseases. Growers are not willful defaulters and they need help from the banks to continue with the farming," he said.
Krishna Rau told bankers: "Mere waiving of interest on loans will not help farmers and banks have to reschedule the existing loans and grant fresh loans without imposing conditions."
Preetham Lal, SLBC convener and general manager, Syndicate Bank, said, banks would reschedule old loans and charge a 9 per cent interest on crop loans up to Rs 3 lakh and 10.5 per cent on term loans. Pomegranate and grape crops have been affected in 13 districts and 11 districts, respectively.
Grapes are grown in about 16,286 hectares. Pomegranate is grown in 14,649 hectares with an annual production of 146,000 tonnes and the state ranks second in the country. Karnataka accounts for about 27 per cent of India's grape production, at 330,000 tonnes and is only behind Maharashtra.
During the drought years, farmers were forced to bring water from far off places in tankers to save their orchards as the water table dropped alarmingly in the northern districts. Jayachandra suggested that all banks charge a uniform rate of interest on crop and term loans in all districts.
On the loan waiver, he said, "The state government will take up the matter with the Central government and discuss the possibility of waiving loans to these growers."
However, he did not commit any deadline for doing the same. Growers producing the three commodities had asked the state and the Centre to bail them out from the financial distress they were in following the loss of crop due to drought and disease over the last few years.
Growers demanded a waiver of bank loans. But, the SLBC has no powers to decide on the waiver of loans. Only the state and Central government have the powers to waive loans if they reimburse the amount to the banks, Jayachandra added.