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Debt relief scheme: RBI swings into action
A day after a Comptroller and Auditor General of India report pointed out irregularities in the Rs 71,680-crore (Rs 716.8 billion) agricultural debt waiver and debt relief scheme of 2008, the Reserve Bank of India on Wednesday 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.
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Debt relief scheme: RBI swings into action
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 and 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.
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Debt relief scheme: RBI swings into action
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.
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Debt relief scheme: RBI swings into action
CAG, in its report tabled in Parliament on Tuesday, 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 pass-through 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."
