The Hindu : Tamil Nadu / Chennai News : NABARD offers fresh, enhanced credit to State

Online edition of India's National Newspaper
Wednesday, Aug 23, 2006

Tamil Nadu

Tamil Nadu - Chennai

NABARD offers fresh, enhanced credit to State

R.K. Radhakrishnan

Bank chairman Thorat calls on Karunanidhi

CHENNAI: National Bank for Agriculture and Rural Development (NABARD) chairman Y.S.P. Thorat called on Chief Minister M. Karunanidhi at the Secretariat here on Tuesday.

It was described as a courtesy call. They utilised the opportunity to discuss NABARD's commitments to Tamil Nadu.

Dr. Thorat also held discussions with Chief Secretary L.K. Tripathy and Finance Secretary K. Gnanadesikan on waiver of loans obtained by farmers from cooperative banks.

Concerns addressed

The NABARD chairman told The Hindu that the bank had three concerns in the wake of the waiver: how the State Government proposed to meet the demand of the depositors ("after all it is the depositors' money"); how the Government proposed to give back the money lent by NABARD and how the State could ensure a better repaying culture in future.

Dr. Thorat said the Tamil Nadu Government had submitted a detailed plan to NABARD. While the short term loans would be paid back to NABARD as and when they fell due, the long term loans would be paid back in three or five years, depending on NABARD's requirement. NABARD has chosen the three-year option.

State Finance officials explained that the Government had taken over the loans of the cooperatives and budgeted the amount to be paid back to NABARD for 2006-07. Hence, repayment was not an issue.

The proposal of the Government was acceptable to NABARD. "We will give fresh, enhanced credit to Tamil Nadu in 2006-07." Dr. Thorat said the State had also sought special liquidity support. NABARD and the Centre would consider this.

Vaidyanathan panel report

Dr. Thorat was hopeful of signing a Memorandum of Understanding (MoU) with the State Government on implementation of the Vaidyanathan Committee report.

Formed by the Centre to revitalise and rejuvenate agriculture cooperative banks, the committee had recommended a recapitalisation fund of Rs.13,596 crore for cooperative banks. It was against any dual control by the State Government.

The State should conduct cooperative elections regularly. The Centre had also consented to signing MoUs with various State Governments. He had brought up the issue with the Chief Minister, Dr. Thorat said and added that the Chief Minister assured him that he would look into it. The recommendations had been accepted by many states, he said.

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