Vidarbha Farmers to Beat Drum and offer Mass Prayer to ‘FM’ ‘to get Fresh Crop Loan before SBI
Nagpur 025th AUGUST 2013
3 million farmers in suicide hit vidarbha region of maharashtra who are already facing a wet drought, are also finding it difficult to secure loans for sowing expenses now they have decided to beat drum before SBI branches and first protest has been orgnized at SBI branch PARVA in Ghatangi taluka of Yvatmal district which is knowm as farm suicide capital of india .thousands of debt trapped farmers will beat drum before SBI barnch and same time hundreds of farm widows will perform mass prayer before the photo of indian finace minister p.chidambaram for his kind intervention to solve on going credit cruch to agrarian community on monday 26th august ,Kishore Tiwari of vidarbha jan andolan samiti (VJAS) informed today .
SBI officer are deying orders of administration and crop Loans are a necessity for farmers in Vidarbha who are trapped in debt due to Poor economics of farming hardly leaves any investible surplus with them for next crop ,facing the clamity of heavy rain and flood forcing to afrmers to kill themselves,Tiwari added.
It is reported that PSU banking behemoth State Bank of India (SBI), is learnt to have issued informal orders to its officers not to entertain applications for crop loans by borrowers. This mainly pertains to districts of Yavatmal ,Wardha, Nagpur, Chandrapur, Bhandara and Gadchiroli, say sources in the bank. This has especially hit the farmers in Wardha where the district central cooperative bank (DCCB), the main source of lending for farmers is in a crisis. So the farmers depend on PSU banks.Sources say many have been turned away from SBI's doors only because they were not among bank's existing borrowers. The unions too have taken up this issue pointing out that the officers manning rural branches are in a dilemma. There are only oral instructions not to entertain fresh cases. With no official orders, they cannot formally deny loans to any applicant. There is also chance that bankers may face ire of local leaders due to it.
SBI has been involved in farm credit scam as per matter reported in TIMES OF INDIA
SBI cover up to lower farm loan losses
A massive exercise over the last two months in State Bank of India branches across India saw farm loan accounts being tweaked to show the current season's standing crop as a security against short-term farm loans which had turned bad as far back as 10 years ago. While the farmers remain unaffected, the drive can help SBI report lower losses on the farm lending front.Insiders say this is the first time that the bank has undertaken such an exercise. SBI's farm loans stand at Rs 40,000 crore with 7 to 8% of bad debts. Experts TOI spoke to say that the exercise is nothing "but fudging of books". An RBI spokesperson said, "We are aware of the issue and examining it."
A mail sent to Mahindra Rekhi, deputy general manager of corporate communications, a month ago has remained unanswered. However, a senor official of general manager rank from the bank's head office in Mumbai, on the condition of anonymity, said there was nothing wrong in the practice. "Farming is a continual business. So, each time a fresh standing crop is there in the fields, the bank has a charge on it. It also has the right to harvest and recover the money," he said.Some of the loans are as old as 2003, but the standing crop of the current season has been placed as a security in the account. TOI has access to documents from SBI's branches in Maharashtra and Madhya Pradesh. "The manipulation took place all over the country," said a source in SBI.
The drive was undertaken to help the SBI beef up its profits, said the source. "Had the manipulation of accounts not been done, the bank would have been forced to provide a higher amount against the losses on account of bad loans. This is just a patch-up job as in coming years if the farmers are unable to pay back the loan, it would have to be shown in the books as losses and SBI would have to write it off," he said.Without a security, the provisioning can go up to 100% depending upon the tenure of delinquency. "So, if most of the crop loan accounts are shown to be backed with a security, SBI has to provide less, leaving scope for a higher profit in the next quarter," the source added.
Several loan documents accessed by TOI from Wardha show that securities were 'inserted' between June and July this year. The loans were for less than Rs 1 lakh for which only the crop is taken as a security. Example 1: The date of opening a loan account of a farmer (no farmers are being named in this story) is shown as 2003. In 2008, the loan was declared out of order as the farmer was unable to pay back. The security in the form of standing crop was placed in July this year. Example 2: The account opening date is 2007, the date out of order is 2008, but the security was included in 2013.
There are other loans which have turned bad between 2009 and 2013 but securities have been included in the accounts only in the current fiscal. The hurried measure of work by SBI is revealed in the pattern where the date of inserting security is the same for several accounts.For loans more than Rs 1 lakh, land is taken as security. Papers shown to TOI in Madhya Pradeshrevealed that even land was being updated as security in the current exercise. Example 1: Opening of loan is 2007, went out of order in mid 2008, in July 2013 land and stock shown as security. Example 2: Opening of loan is early 2007, out of order later the same year, land shown as security in first week of July.
The senior SBI officer too admitted that the provisioning for bad debts will come down when a fresh security is shown in the accounts of the borrowers.
A chartered accountant, who has undertaken rural branch audits of banks, said, "Even though land is taken as security, it is considered to be a non-recoverable asset. There has been no instance of any PSU bank taking over an agriculture land to recover its dues. There are several legal hurdles to it. In same way, harvesting the crop to recover a loan is also out of question. Under the circumstances, the SBI should have considered such loans as unsecured."
Indian when visited vidarbha ti give healing touch crisis driven families where farm suicides reported in july 2006 ,announced that farm credit will available to debt trapped farmers and bank officials will go to door step each farmers to give fresh crop laon but ground reality last 8 years after PM package and mega loan waiver PSU Bank credit has been frozen and maxumum farmers have gone in debttrap private money leanders and MFI and pathatic hostile saga is repeated in the election year hence you want FM intervention ,Tiwari urged.