Bombay High Court orders banks to pay out crop loans and repay interest to farmers
As a welcome relief to farmers, the Bombay Supreme Court has ordered banks to make withdrawals agricultural loans directly within the framework of the state government’s loan waiver regulation, The Indian Express reported on Sunday. The court also urged banks not to insist on paying interest on previous loans since October 1 last year, as the government waived it.
The Aurangabad Bank ordered that banks should reimburse the farmers if they have already collected the interest amounts.
On October 9, a division bank of Judges SV Gangapurwala and Shrikant D Kulkarni passed the public interest litigation order filed by right to information activist and farmer Kishore Tangade. Lawyer Satish Talekar, who appeared for Tangade, said the banks had not granted crop loans to nearly one lakh farmer and told them that new loans would only be released if they paid interest on previous loans. He quoted them example Aurangabad District Central Cooperative Bank to bring his case.
The banks did this despite the state government’s flagship program – Mahatma Jyotirao Phule Karjmukti Yojana – under which arrears of up to Rs 2 lakh have been written off on loans drawn between April 2015 and March 2019.
Talekar also said that given the ongoing harvest season in Kharif, the banks’ delaying tactics would result in huge losses for farmers who would not be able to benefit from the season without money.
The court found in its ruling that 2020 was a “stormy year” due to the coronavirus pandemic and that it is necessary for farmers to receive financial support in order to take advantage of the timely rainfall in the sowing. “We hope and trust that the banks are aware of the farmers’ problems …