Punjab CM Urges Speedy Loan Recovery from Defaulters

Chandigarh, May 6 (PTI) Punjab Chief Minister Bhagwant Mann on Tuesday ordered expediting the process of recovery from defaulter account holders of cooperative banks so that there is no hindrance in lending to agriculture and allied activities.

Mann was reviewing the progress of the functioning of cooperative banks, according to an official release.

Mann said defaulters are the biggest obstacle in the development of banks because the money stuck with them hampers financial assistance to others in need.

He said small and medium farmers always return loans to banks on a priority basis, but it is unfortunate that large farmers are defaulters of cooperative banks.

He said government employees who have taken loans from cooperative banks must repay their dues immediately.

He directed the cooperation department to adopt an appropriate process so that complete recovery of loans can be ensured.

Expressing dissatisfaction over the recovery of crop loans being only 65 per cent, the chief minister said this is having a bad effect on the cooperative banking system.

He said the cooperative banks offer a 3 per cent interest rebate on timely repayment of crop loans, yet many farmers do not repay loans, resulting in not only paying higher interest but also being deprived of taking loans or other benefits in the future.

The state government would not accept discrimination with our farmers, he said.

Farmers in the state are given approximately Rs 8,000 crore in crop loans every year through 3,523 cooperative societies via cooperative banks, as per the government.

"This is provided at an interest rate of just 7 per cent and if the farmer repays on time, they get a further 3 per cent rebate in the interest rate. On the contrary, farmers who do not repay on time have to pay 2.5 per cent extra interest, which becomes 9.5 per cent," he added.