Wayanad landslide: Double whammy for survivors as bank deducts EMIs from relief aid, Kerala CM intervenes

The Kerala Gramin Bank deducted loan EMIs from the accounts of the Wayanad disaster survivors. (PTI Photo)

Adding insult to the injury for survivors still coming to terms with the losses following the deadly landslides in Kerala’s Wayanad that left 230 people dead and over 100 missing, the Kerala Gramin Bank deducted loan instalments from the accounts of those who received money in the form of an immediate relief assistance from the state government.

Multiple reports cited victims as saying that banks deducted EMIs of Rs 3,000 and above from the accounts of the survivors as soon as they received Rs 10,000 from the Left-ruled state government.

The Government of India holds a majority stake in the Kerala Gramin Bank -- 50 percent directly and an additional 35 percent through the government-owned Canara Bank. The Kerala government holds 15 percent stake.

A dairy farmer claimed that the bank deducted Rs 3,400 from his account as soon as the state government’s promised relief aid was transferred to his bank account. “The landslide washed away my cattle shed and eight cows. We don’t have anything left,” Rajesh of Choorimala told Times Of India, adding that he had planned to use the amount to pay advance for his rented accommodation.

The Gramin Bank’s move triggered flash protests by various youth organisations outside its Kalpetta, Wayanad branch where an amount of Rs 15,000 was debited from the account of one of the survivors on account of loan repayment.

As the controversy spiralled, the government jumped into action and elicited a response from bank officials. KS Pradeep, the general manager of the State-Level Bankers’ Committee, said that the bank had informed him that the money was deducted on account of standing instructions in the accounts issued before tragedy struck the region.

Meanwhile, the state government has also issued directions asking the Gramin Bank to refund the amount deducted from the survivors’ accounts.

Kerala Chief Minister Pinarayi Vijayan said that banks in the state should write off loans of Wayanad landslide victims and that extending the repayment duration wouldn’t solve the problem.

"The only thing we can do is write off the entire loans taken by people in these affected areas," he said on Monday, adding that many of those who had availed the loans were dead and their land became unusable after the disaster.

Writing off the loans wouldn’t impose any unbearable burden on the banks, he said at a meeting with the SLBC, adding that a temporary relaxation in interest amounts or extension of time for remitting monthly instalments would not be a solution in the landslide-hit regions.

The Kerala Gramin Bank, meanwhile, has assured the government that that it will correct its action of retrieving loans from the relief money given to those who lost everything in the Mundakkai-Chooralmala disaster.

The bank further said that the money has been remitted to the accounts of three people from whom the EMI amount has been deducted.

Earlier, the Kerala Bank in the state had waived off loans taken by villagers from Mundakkai and Chooralmala considering the devastation caused by the landslide.