'Loan waiver sends wrong message to borrowers’

The repayment culture gets badly impacted and it would be several years before some semblance of loan discipline can be restored. To fulfil their mandatory obligations banks might implement the scheme of waiver and even may disburse fresh loans and oblige the government in reaching the revised target of Rs 2,80,000 crore. It would, however, be a task for the managements to inculcate and sustain the culture of recovery amongst their field staff. From the farmers’ perspective too, the scheme has too many flaws. First, it sends a message to the honest borrowers, for the umpteenth time, that they have been unwise in repaying their loans. Second, the farmers who have invested their own resources or borrowed from money lenders, with no borrowings from the banks, stand to lose out. Third, the conscious and genuine farmers who have invested more of their savings than borrowings would be deprived of the benefit from this generous scheme