Chandigarh: National Bank for Agriculture and Rural Development (NABARD) has asked the Haryana government to improve loan recovery from farmers in order to protect the state cooperative credit structure.

"We have told the Haryana government to improve loan recovery of cooperative loans from farmers and bring discipline in lending otherwise (cooperative credit) institutions will not survive," NABARD Chief General Manager K Sayeed Ali told reporters in Chandigarh on Friday.

The matter assumes significance as farmers at various places including Jind, Kaithal in Haryana have stopped repaying loan to state-owned Haryana State Cooperative Agriculture Rural & Development Bank Ltd (HSCARDB), which has adversely affected its financial health, an HSCARDB official said.

"The recovery by HSCARDB for long-term loan has been abysmally low at 16 percent as on December 2012 with outstanding loan of Rs 2,000 crore and 40 percent borrowers being chronic defaulters.

"With bank facing fund shortage because of non-payment of loan, we have stopped advancing to farmers in certain areas in Haryana where loan recovery is very poor," the official added.

Defaulters are taking the refuge of amendment in Haryana Cooperative Societies Act 1984 carried out by state government in 2010 thereby disallowing cooperative banks from auctioning the mortgaged land of farm loan defaulters. Loan defaulters' land can only be leased out for farming while 50 percent of farm proceeds would go to bank as loan repayment.

"When farmers know that their mortgaged land could not be auctioned then why they will return the money," the official added. NABARD has even expressed displeasure over the state government's advertisements highlighting achievements last month in newspapers saying "No Arrest of Farmers, No Auction of Farm land" for "Non-payment of Cooperative Loans."


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