Axis Bank loans: Govt. offers all 180 settlements of debtors

The state government is committed to protecting the interests of all farmers who have taken out loans from Axis Bank, including the five who have received an arrest warrant. Deputy Commissioner SB Bommanahalli assured Wednesday.

"Following instructions from the state government, we decided to take various measures to free all farmers from debts contracted with the bank," he told reporters. He spoke at the end of a stakeholder meeting including the farmers involved, the leaders of Axis Bank, the heads of the cooperatives and the Department of Agriculture and the responsible for the bank.

"First, we will begin a loan exemption procedure for all those who are eligible. About 25% of the 180 farmers with outstanding loans are eligible for a full loan waiver. The rest will be assisted by the ad hoc settlement system that will be put in place at the taluk level, "he said. Government officials will be present at OTS meetings.

Axis Bank has taken legal action against 744 farmers in Karnataka, including 180 in the Belagavi district. Of these, five received arrest warrants.

Officials told the DC that only about 25 percent of farmers in default are eligible for a loan waiver. The state government would write to the bank about these farmers. About the others, the bank would put in place a punctual settlement system.

About 60% of the loans were disbursed in 2009. The rest was taken later. About 50% of the loans are agricultural loans. The others were taken to buy tractors, drip or pipelines or for land development.

The Axis Bank management team, led by S. Dayanand, had accepted the CD's suggestion to withdraw the lawsuits against farmers or to change the jurisdiction of the cases. "They said they would take a legal opinion and decide what to do," he said. He described the response of bank officials as "positive".

Case in Kolkata

At the meeting, the farmers complained that the bank did not want to extend the deadline. They were also unhappy with the bank for filing files in Kolkata and not in Belagavi or Bengaluru. "It will be difficult for us to go to Calcutta and find a lawyer to defend us," they said. Bommanahalli said the government would protect their interests and that no bank would be allowed to harass farmers. He asked the bank officials to provide detailed information on the failing farmers and on the lawsuit brought against them.

Bank officials said the loans were sanctioned in 2009 and the 180 farmers remained in default for 9 years. Some did not even pay a single payment. They claimed that the warrants were punishable by death and were issued only when the farmers refused to respond to several summonses. The cases were filed just a few months ago.

An officer at the meeting said that Sudhir Kumar Reddy, SP, objected to the bank's procedure of sanctioning loans, including taking blank checks from farmers. He asked bank representatives to follow due process to ensure due diligence when soliciting clients.

Prashant Shah, vice president of the bank, assured the DC that it would withdraw any legal action against farmers on the call of the government.

Mr. Dayanand said that the bank's transactions were computerized and that the main banking mechanism did not distinguish between failing in agriculture and others. "A lawsuit would be initiated automatically," he said.