Farm debt waiver: RBI seeks info on action taken by banks

In view of serious observations made by official auditor CAG, the Reserve Bank today asked banks to submit information about the irregularities in the Rs 52,000 crore farm debt waiver scheme along with the details of amount recovered and FIRs filed.

RBI has asked the banks to provide information with regard to the scheme in a prescribed format by 7th working day of every month, the central bank said in a notification.

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The Performance Audit report of the Comptroller and Auditor General (CAG) on the debt waiver and debt relief scheme 2008 has rocked Parliament leading to adjournment of the Lok Sabha.

The CAG report, which was tabled in Parliament yesterday, has found number of shortcomings in the implementation of the Rs 52,000 crore farm debt waiver scheme pointing out that thousands of beneficiaries were not eligible while those eligible were denied the benefits.

Amidst the ongoing controversy, RBI has asked banks to provide information in tabular form with regard to ineligible beneficiaries, the eligible beneficiaries who were denied loans, money given to microfinance institutions, tampering of
records and cases where relief certificates were not issued.

Besides, the banks will also be asked to provide details of amount recovered, FIRs lodged, responsibilities fixed and action taken. The banks will also have to provide reasons in case they fail to take appropriate action and file FIRs.

The CAG report also discloses violation of the guidelines for implementation of the scheme with a private schedule commercial bank shown to have received reimbursement for loan of Rs 164 crore extended to Micro Finance Institutions (MFIs).