RBI swings into action after CAG picks holes in farm debt relief scheme
Asks banks to take immediate action against officials responsible for lapses
A day after a Comptroller and Auditor General of India (CAG) report pointed out irregularities in the Rs 71,680-crore agricultural debt waiver and debt relief scheme of 2008, the Reserve Bank of India today swung into action. It asked lenders to verify all the accounts granted benefits under the scheme.
RBI said administrative and accounting lapses on the part of officials and auditors should be identified and immediately corrected and action initiated, without any exception.
The cases where ineligible accounts were extended benefits, RBI said, should be dealt with and recoveries made on priority to ensure there was no loss to the exchequer. Recovering such amounts fully would be the personal responsibility of institutional heads, it said. This implies, chairman & managing directors of public-sector banks and chief executives of private-sector banks would be held responsible for such recoveries.
All the cases of tampering of records should be identified and stringent action, under relevant sections of the law, initiated, RBI said, adding chief vigilance officers should monitor the action regularly.
In the cases where debt waiver certificates were not issued to eligible farmers, immediate issuance and proper record-keeping for inspection were asked for, indicating RBI planned to study those at the time of annual inspection of banks.
The central bank also asked banks to prepare a list of all eligible farmers not given benefits under the scheme and examine why. In the cases where action appeared to be with malafide intention or carelessness, action should be initiated, it added.
Action-taken information on all these points would have to be sent to RBI before seventh of every month.
CAG had, in its report tabled in Parliament yesterday, criticised the Department of Financial Services and RBI over lapses in the scheme. The central bank had told CAG its role was of a mere passthrough agency, and not a monitoring authority, in the scheme. The government auditor had, however, rejected this argument, saying: “Audit doesn’t agree with RBI’s response, as guidelines issued by DFS required RBI and Nabard to put in place a system for monitoring the progress and implementation of the scheme on a daily basis till July 2008 and on a weekly basis thereafter.”
RBI said administrative and accounting lapses on the part of officials and auditors should be identified and immediately corrected and action initiated, without any exception.
The cases where ineligible accounts were extended benefits, RBI said, should be dealt with and recoveries made on priority to ensure there was no loss to the exchequer. Recovering such amounts fully would be the personal responsibility of institutional heads, it said. This implies, chairman & managing directors of public-sector banks and chief executives of private-sector banks would be held responsible for such recoveries.
All the cases of tampering of records should be identified and stringent action, under relevant sections of the law, initiated, RBI said, adding chief vigilance officers should monitor the action regularly.
In the cases where debt waiver certificates were not issued to eligible farmers, immediate issuance and proper record-keeping for inspection were asked for, indicating RBI planned to study those at the time of annual inspection of banks.
The central bank also asked banks to prepare a list of all eligible farmers not given benefits under the scheme and examine why. In the cases where action appeared to be with malafide intention or carelessness, action should be initiated, it added.
Action-taken information on all these points would have to be sent to RBI before seventh of every month.
CAG had, in its report tabled in Parliament yesterday, criticised the Department of Financial Services and RBI over lapses in the scheme. The central bank had told CAG its role was of a mere passthrough agency, and not a monitoring authority, in the scheme. The government auditor had, however, rejected this argument, saying: “Audit doesn’t agree with RBI’s response, as guidelines issued by DFS required RBI and Nabard to put in place a system for monitoring the progress and implementation of the scheme on a daily basis till July 2008 and on a weekly basis thereafter.”
Farm loan waiver scheme: PM vows action if CAG is right ( Economic times )
NEW DELHI: Prime Minister Manmohan Singh has promised stringent action against wrongdoers in case any irregularity is found in the government's farm loan waiver scheme as alleged by the Comptroller and Auditor General.
Singh made this assurance in an impromptu statement in the Rajya Sabha on Wednesday even as proceedings in both the Houses of Parliament were disrupted over the CAG report that alleged irregularities in implementation of the Rs 52,000-crore debt waiver scheme. "The reference is to the CAG report on loan waiver scheme. This is a matter, which should be entrusted to the public accounts committee as per normal practice. If there are any irregularities, which have been shown, I assure the House that we will take stringent possible action against the defaulters," Singh said. BJP leader Ravi Shankar Prasad, who raised the issue during zero hour, alleged a scam in the scheme. "It is a case of clear scam. Bank officials in connivance with the middlemen siphoned off the money of farmers," he said.
Singh's response did not mollify BJP members, who trooped into the well of the House forcing Deputy Chairman PJ Kurien to adjourn the House. In Lok Sabha, the government agreed for a full-fledged debate in the House. "I share the sentiments of the members. It is not only a matter of grave concern but it is a matter of shame," Parliamentary Affairs Minister Kamal Nath said. He said the timing of the debate could be discussed in the House business advisory committee on Thursday.
Earlier in the House, Leader of Opposition Sushma Swaraj demanded that officials of banks and auditors be questioned and FIRs filed.
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