'Loan waiver of drought-hit ryots not a good idea'

SHIMOGA: R M Manjunath Gowda, Apex Bank, president, has opposed the demand of a section of farmers and some political parties to waive crop loans of farmers in drought-affected areas. This, he feels, would affect thousands of primary agricultural cooperative institutions and banks.
Gowda told TOI on Tuesday that if the state government conceded to the demand, it will have to repay Rs 6,000 crore to the institutions as loan waiver amount.When the state government is yet to reimburse last year's loan waiver of Rs 300 crore, it is impossible to meet the burden of repaying Rs 6,000 cr, he said.
Gowda said that the cooperative institutions and primary agricultural banks in the state have shown remarkable improvement and have disbursed a huge amounts to farmers with 1 per cent interest and helping prompt payees to get 3 per cent subsidy from the central government. He urged chief minister D V Sadanda Gowda to consider all aspects before taking a decision on loan waiver.
According to him nearly 90% of farmers in the state, including those from the drought-affected areas, have repaid their dues. If loan is waived for only a few, it will set a bad precedent.