Defunct land development banks to be shut down, Maharashtra to acquire properties
The decision comes as the non-performing assets (NPAs) of these banks had built up beyond recovery. The NPA of the 29 land development banks and state cooperative Agriculture Rural Multipurpose development bank totals to Rs 1,897 crore.mumbai Updated: May 12, 2015 22:38 IST
Twenty-nine district land development banks will be shut down and the state will acquire their properties, the Maharashtra cabinet decided on Tuesday.
The decision comes as the non-performing assets (NPAs) of these banks had built up beyond recovery. The NPA of the 29 land development banks and state cooperative Agriculture Rural Multipurpose development bank totals to Rs 1,897 crore.
Further, unrecovered loans from farmers have accumulated to Rs 946 crore.
Both Nabard and the Reserve Bank of India (RBI) had recommended winding up the banks’ operation — a suggestion also made by a high-power committee appointed under the finance minister by the previous government.
“Around 37,278 farmers took loans from the banks by mortgaging lands. These lands will be given back to them, if they pay the principal amount of the loan,” said cooperation minister Chandrakant Patil. Patil said the banks had lost their relevance as both national and private banks were aggressively expanding their networks.
The banks’ employees will be compensated, said chief minister Devendra Fadnavis. “Those under 50 years will be given preference in government jobs, by relaxing the recruitment criteria. Employees who choose voluntary retirement will be given financial compensation,” he said. The banks owned large tracts of land, the market rate of which are more than Rs 1,500 crore. Patil said the lands will be acquired by the state and used for offices.
Developments of the day
1. Circuit bench for speedy disposal
* The state cabinet gave its nod to a proposal of setting up a circuit bench of the Bombay High Court at Kolhapur to ensure speedy disposal of around 25,000 cases pending from six districts, Solapur, Sangli, Satara, Ratnagiri, Sindhudurg
* The state will request the HC for approval of the bench
* CM Devendra Fadnavis said the government has decided to ask for a similar bench for Pune.
* HC judges from Mumbai will visit the circuit bench on a certain days to dispose of the cases.
2. Sugar subsidies
* For sugar factories to be able to pay Fair and Remunerative Price to farmers, the state has decided to give an incentive subsidy of Rs1,000 crore a metric tonne for export of raw sugar
* This will push export of sugar, as a result of which retail price will go up and excessive stock (accumulated to 39 lakh metric tonnes) will be reduced
* The decision will cost the state exchequer Rs 80 crore
3. For paddy farmers
* A subsidy of Rs 250 a quintal for paddy was announced to help farmers in distress
* The subsidy is above the minimum support price of Rs 1,400 a quintal
* Decision will benefit farmers from Vidarbha
4. Amnesty scheme for traders
As announced in the budget session by CM Devendra Fadnavis, the cabinet approved an amnesty scheme for traders, to clear dues of the local body tax. With the possibility of the government scrapping the LBT rising, the traders chose to hold paying taxes, which led to piling up of unpaid taxes by many municipal corporations in the last fiscal year.