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Vinson Kurian

THIRUVANANTHAPURAM, Nov. 7

HAVING been made to contend with issues such as non-repayment of agricultural advances and enhancement of scale of finance, commercial banks and regional banks in Kerala are looking to the Union Finance Minister, Mr Jaswant Singh, for further direction to proceed in the matter.

At a function in New Delhi on Wednesday, the Finance Minister had asked banks to align interest rates for agriculture and rural sectors with the soft interest rate structure in vogue in the rest of the economy.

According to him, interest rates for the farm and rural sectors which engaged 80 per cent of the country's population were still high at 12 to 13 per cent. Several cuts administered to the bank rate in the interregnum had not been able to influence the ruling rates for the farm sector.

Bankers and farmer organisations are eagerly looking for pointers in the Finance Minister's call that could possibly engender a change in the farm credit scenario obtaining in the State.

Commercial banks and regional banks have in the recent past been made to seek the intervention of the State Government for initiating necessary steps to ensure unhindered recovery of agricultural advances. This, according to banking sources here, were "very much essential for recycling funds as also for credit expansion''.

A number of organisations in the northern districts supposedly taking cudgels on behalf of farmers devastated by drought and slump in prices had put up stiff resistance to recovery drives. This had led to a situation where recoveries had drastically come down.

The Chairman of a leading rural bank had even suggested that the State Government come out with a clarification saying that debt relief is not applicable to scheduled commercial banks. The District Collectors could call a meeting of all farmer groups and organisations to impress upon them the need to desist from unlawful activities.

Bankers have also been requesting the State Government to enact legislation on the basis of the model Bill evolved by the Talwar Committee for recovery of outstanding dues in the State. The committee had recommended that the State Government empower an official with the authority to issue an order having the force of a decree of a civil court for payment of any sum due to bank by sale of property charged/mortgaged in its favour to facilitate prompt recovery without having to resort to protracted and time consuming litigation in civil courts.

The committee suggested that the State Governments enact a legislation on the basis of the model bill. The State Government is seized of the matter and has informed the State Level Bankers' Committee that the Commissioner of Land Revenue was being consulted in the purpose.

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Non-repayment of agricultural advances — Bankers looking for direction from Finance Minister

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