Chief minister Prithviraj Chavan has convened a meeting next week to find a solution to the financial crisis confronting the cooperative sector.
The state government has decided to facilitate Rs23,250 crore crop loans to the farmers ahead of the crucial kharif season. This is to avert the financial crisis following dismissal of the board of directors of the Maharashtra State Cooperative Bank by the Reserve Bank of India.
Chief minister Prithviraj Chavan has convened a meeting next week to find a solution to the financial crisis confronting the cooperative sector.
Notwithstanding the crisis because of development in the MSCB, the government reckons that if it does not step in to provide loans, the farmers will be driven to private money lenders and get exploited. Setting aside the bank problems, the state, along with the Centre, is planning to provide loans to almost 60% of the farmers in state.
Loans of almost Rs12,860 crore will be financed through various district and cooperative banks across the state. The remaining amount will be raised from the national banks. However, the government plea to make NABARD refinance Rs4,800 crore has been turned down. NABARD has agreed to refinance up to Rs2,400 crore citing poor financial status of the MSCB.
According to NABARD, the higher funds cannot be accorded as there is poor possibility of recovery. The loans will help 56 lakh farmers. According to minister for cooperation Harshvardhan Patil,
“The state will ensure that the farmers availing of the loans will not be inconvenienced during the khariff season. The government has initiated several measures by raising the allocations for fertilizers and reasonably prices seeds for the farmers.”
The farmers will be accorded loans up to Rs50,000 at zero interest rate. And those availing between Rs50,000 and Rs3 lakh will be charged 2% interest provided they have not defaulted in repaying the earlier loans.
In the wake of growing investments in the agriculture sector including rising land prices, the state government wants to commit to higher loan allocations of up to Rs40,000 crore in the year 2013-14. The state wants to make the financial commitment through its cooperative banks and remaining amount through nationalised banks.
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