Fake Farm Loan Scam ‘Worth 2,000 Crore’ Surfaces in MP, Govt Launches Crackdown

Bhopal: A case of massive corruption in farm loans granted during the previous BJP government in Madhya Pradesh seems to be plaguing the Jai Kisan Rin Maafi Yojana under the newly elected Congress government, according to reports.

Hours after forming the government, Congress Chief Minister Kamal Nath had announced loan waivers for farm loans below Rs 2 lakh, taken till March 31, 2018.

With the rollout of loan waiver scheme, cases of ‘fake loan scams’ have started emerging from various districts of the state such as Gwalior, Sagar, Harda, Agar-Malwa, Satna, Katni, Chhatarpur and Indore among others.

Farmers from across the state have complained that farm loans have been taken in their name without their consent or have been sanctioned in the name of dead persons. Many claimed that their names were on the farm loan waiver beneficiaries list even though they had not taken any loan, or had repaid their dues.

Disappointed with one such fake farm loan scam, farmers from Sagar village have threatened to commit ‘mass suicide’, as their names have appeared in the loan waiver list even when they don’t have any dues or have far smaller loans than the amounts listed.

Farmers of Hilgan village, about 32 km from Sagar district headquarters, assembled at panchayat office to protest against the faulty list on Saturday. “We will commit mass suicide if this issue is not resolved at the earliest,” they said. Farmer Santosh Singh said, “Till the time our names are on the list, we will get no sleep.”

Ramkumar Singh Lodhi, one of these farmers had reportedly gone to see the farm loan beneficiaries’ list at the panchayat office, which displayed his name among those who are under debt. The list not only mentioned a substantial loan in his name, but also named his father, who had died a few years ago.

“The list of farmers displayed under Jai Kisan Rin Maafi Yojana mentioned a farm loan of Rs 9,547 in my father’s name, while an amount of Rs 70,481 was mentioned in my name,” said Lodhi.

He admitted to taking a loan for sowing gram crop earlier this year, but said it was only Rs 17,000. “My father had never taken any loan. Farmers in my village are facing some or the other crisis for the last four years, and see no light at the end of the tunnel,” he added.

Another farmer, Brajendra Singh, said, “This is a cruel joke on us. Almost 100 farmers of the village are affected, and those who have never taken loan have been made defaulters out of the blue.”

After the reports of corruption, the state government has launched a crackdown on fake loans by registering FIRs against several cooperative bank employees in Sagar, Gwalior, Harda and Katni. In Indore, departmental inquiry has been initiated against three officials.

Till then, in two separate places, police filed two FIRs against cooperative bank officials and cooperative society leaders – Gwalior and Agar-Malwa – and nabbed some of the accused.

On January 19, 2019, Newsclick has reported a fake farm loan scam of Rs 120 crore of Gwalior cooperative bank, which later turned out to be a tip of an iceberg.   

The state government doesn’t want the fake loan controversy to cast a cloud on the agriculture loan waiver scheme, which is being rolled out in time to beat the model code of conduct ahead of Lok Sabha election. CM Nath has promised that 35,000 farmers would have availed the waiver by the time the code comes into effect.

CM Kamal Nath has said the fraud has been going on for years, and could exceed Rs 2,000 crore.

The Cooperatives Minister Govind Singh said a ‘thorough investigation’ is needed in these cases. “A special audit may be held to reach the root cause of the scam that started in 2004 when BJP was in power,” Singh told media after the news broke out.

“It is a huge scam and we will get it investigated. In the past few years, cooperative bank employees were withdrawing money of poor farmers without their knowledge. They were also taking benefits of farmers’ schemes and, again, farmers were unaware about their involvement,” Singh said.

Arjun Ahirwar, a farmer of Bhandara village in Chhatarpur, said, “I had taken a loan of Rs 6,000 three years back, and repaid it in full. But the list displayed in the village panchayat mentioned Rs 2.40 lakh against my name. I was stunned.”

Another farmer, Komal Singh, said, “I took Rs 20,000 loan three years ago, but the list shows dues of Rs 1.89 lakh against my name.” In some cases, names of dead farmers have made it to the list. General manager of Chhatarpur Cooperative Bank, Suresh Rawat, has already ordered an inquiry.

‘Only genuine farmers will benefit’

Cooperatives Minister Singh said, “We will ensure that the names of farmers who did not take loans or are dead will be deleted from the lists, and new list will come up after the probe. We will make sure that all genuine farmers get loan waiver benefits.”

He alleged that the cooperative movement in Madhya Pradesh had “collapsed” in 15 years of the BJP rule. “A large number of cooperative banks have huge NPAs. The cooperative bank in Bhind (his hometown) has 55 per cent NPA,” Singh said, pointing out that in a Vidhan Sabha question, the erstwhile BJP government had “admitted to irregularities of Rs 1,500 crore and involvement of 2,100 people in cooperative department in 2007”. But no action was taken, he said.

A curious case of Satna district

A list of 1,800 farm loan beneficiaries published by the Satna Cooperative’s Dureha branch aimed at waving loans worth Rs 184 crore.

Soon after, the farmers started complaining that the list had names of dead people or those who had not taken any farm loan. They reported it to the branch manager and district administration.

Sensing gravity of the scam, the Satna district administration has ordered a probe in the allegations. A five-member team has been constituted by the district administration to look into this matter.

Chief executive officer of district co-operative bank Satna, K L Raikwar said, “There were complaints regarding the list of farmers who had outstanding amount that was put up by the Dureha co-operative bank and subsequently a district-level committee has been constituted by the district collector to probe it.”

Besides Satna, similar cases of fraud farm loan have been reported from other districts like Gwalior, Sagar, Agar-Malwa, Indore, Harda, Katni, Chhatarpur and others.