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LATEST NEWS UPDATES | Contrasting rules for farm, corporate loans -Devinder Sharma

Contrasting rules for farm, corporate loans -Devinder Sharma

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published Published on Apr 28, 2022   modified Modified on Apr 29, 2022

-The Tribune

While many of the big defaulters have escaped abroad, why is it invariably a farmer (or a small borrower) who is left to face ill-treatment and injustice in the loan recovery process? While the big defaulters are treated with kid gloves, farmers are always treated with a different yardstick, as if they are children of a lesser god.

WHILE the Punjab State Cooperative Agricultural Development Bank (PADB) has issued arrest warrants against nearly 2,000 farmers with landholdings exceeding 5 acres to recover the outstanding dues, the nationalised and private sector banks have refrained from even divulging the names of hundreds of borrowers whose bad loans — amounting to Rs 11.68 lakh crore — have been written off in the past 10 years. Different strokes for different folks?

The total outstanding amount against 71,000 farmers in Punjab is around Rs 3,200 crore, for which the cooperative bank is planning to speed up the recovery process, which includes serving arrest warrants against loan defaulters, besides arbitration and persuasion.

Fair enough, but how come a majority of the 34 private and public sector banks have quietly written off corporate default of Rs 2.02 lakh crore in the financial year 2020-21? And further, in the first six months of the 2021-22 fiscal year, banks have already written off another Rs 46,382 crore, and Rs 39,000 crore in Q3.

That makes one wonder: when was the last time one heard of arrest warrants being issued against corporate defaulters? While many of the big defaulters have escaped abroad, why is it invariably a farmer (or a small borrower) who is left to face ill-treatment and injustice in the loan recovery process? While the big defaulters are treated with kid gloves, farmers are always treated with a different yardstick, as if they are children of a lesser god.

With the Punjab government coming under fire, Finance Minister Harpal Singh Cheema did well to order the withdrawal of all such warrants, but the bigger question that stays is why farmers have to face such a harsh treatment that necessitates them to undergo a jail term. The humiliation that farmers suffer as a consequence is what increasingly forces them to commit suicide.

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The Tribune, 28 April, 2022, https://www.tribuneindia.com/news/comment/contrasting-rules-for-farm-corporate-loans-389909


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