Loan waiver will not lead to collapse of banks: FM

Loan waiver will not lead to collapse of banks: FM By V S Chandrasekar New Delhi, March 2(PTI)Finance Minister P Chidambaram today sought to allay apprehensions that the Rs 60,000 crore farmers' package will lead to collapse of the cooperative and scheduled commercial banks and weaken the banking system. A combative Finance Minister strongly defended the budget proposals including the loan waiver, which opposition parties have said was aimed at Parliament elections, and expressed confidence that the budget would spur growth despite the fears of global slowdown. "I don't think," he shot back when asked about fears that the loan waiver scheme to help four crore farmers will lead to collapse of the cooperative banks and the scheduled commercial banks. "I have said whatever loans are written off an equivalent liquidity will be provided to the banks concerned. That is a statement which I am sure Dr Alagh (agricultural expert) will understand and appreciate. As for A B Bardhan (CPI leader) I have nothing to say," he said when asked about their comments that the waiver scheme could lead to collapse of cooperative banks. Alagh, a former Planning Commission member and a Minister of State for Agriculture, had said that the Rs 10,000 crore waiver given by V P Singh government had led to closure of several cooperative banks. The Finance Minister also said Bardhan should stand up and be counted as being opposed to the loan waiver scheme. "I don't know what his position is," he said. To a question about farmers owing repayment of loans to money lenders, he said, "which private money lender should I compensate." Tags- Source : ptinews.com

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