Bombay HC asks banks to disburse crop loans, refund Rs 5-crore interest to farmers

A division bench of Justices S V Gangapurwala and Shrikant D Kulkarni on October 9 passed a ruling on public interest litigation (PIL) filed by RTI activist and agriculturist Kishore Tangade, filed through advocate Satish B Talekar, who sought from the banks not to charge interest from October 1 last year till the actual benefit was given to the eligible farmers.

In January this year, the state had rolled out its flagship scheme — writing off arrears up to Rs 2 lakh for loans availed between April 2015 and March 2019. The state had come up with the scheme after it noticed that between 2015 to 2019, a drought-like situation prevailed throughout Maharashtra while some places witnessed unseasonal rains leaving agriculturists in losses.

Advocate Talekar submitted that despite the state government’s directions, the banks were holding the farmers to ransom by telling them that new loans would be released only if the farmers paid interest accrued after October 1 last year on previous loans. He said the release of crop loans to nearly one lakh beneficiaries were stalled.

After hearing submissions, the bench observed, “The year 2020 is a tumultuous year. The entire country is affected by the pandemic of Covid-19. Fortunately, this year the state witnessed timely rains and it is necessary that the agriculturists get financial assistance for the kharif sowing season.”

It added, “We hope and trust that the banks would be alive to the problems of agriculturists. The precarious condition of farmers has been considered by the state government in the loan waiver scheme. Though the loan is waived, the beneficiaries cannot be deprived of the crop loan for the kharif season 2020 on technical ground.”

The court also directed the banks not only to disburse loans to remaining beneficiaries under the scheme at the earliest but also to refund the interest, to the tune of Rs 5 crore, collected by them immediately to farmers and disposed of the PIL.