How a Rs 3,000 crore farm loan scam got exposed in Madhya Pradesh

By Shahroz Afridi and Manish Mishra

Bhopal: Had there been no transparency in the ‘Jai Kisan Fasal Rin Mukti Yojana’, Kamal Nath-led Congress government’s farm loan waiver scheme in Madhya Pradesh, a Rs 3,000 crore scam under the previous government would, probably, have never got exposed.

Within hours of assuming office, the first decision taken by chief minister Kamal Nath was to waive off loans taken by distressed farmers as promised during the elections. The application process began from January 15.

Co-operative societies and nationalised banks were asked to display names of farmers who took loans at all the 23,006 gram panchayats of the state for the sake of transparency.

The lists took farmers by surprise and opened a Pandora's box all over Madhya Pradesh.

Several farmers complained that their names have appeared in the list of debtors but they never took the loan while others had repaid it but their name remained in the list. There was another category of farmers whose names showed more amount of loan than what they had taken from the co-operative society or bank.

Mysterious loans

Yogesh Patel is once such farmer who was left shocked when his neighbours told him that his grandmother Shanta Bai who had passed away five years ago, was in the list of loan waiver beneficiaries.

“The bank is showing around Rs 4 lakh as the outstanding amount on my grandmother. I cannot pay the huge amount. It is not clear whether she had taken the loan or bank staff have fudged the entries in her name. I have complained to the authorities,” Patel said.

Sethi Patel, another farmer of Neemgaon village, said a co-operative bank enlisted a loan of Rs 2.7 lakh in his name in another village. "I suspect that the bank has forged my address proof. Now at the time of loan waiver scheme, their corruption has come to the fore,” he said.

In Shivpuri district, teacher Pankaj Sharma said Karhi Co-operative Society has enlisted his father's name in the loan waiver beneficiary list but he had died 18 years ago. “According to the list, my father has Rs 92,800 of outstanding loan,” he said.

According to villagers of Karhi, the society has enlisted 200 farmers in the list with a total loan of Rs 1.27 crore on their heads. Out of 200 farmers, 27 have so far lodged complaints. 

Chief minister Kamal Nath has said that reports coming from across the state indicate that scam figures are expected to reach Rs 3,000 crore. State transport minister Govind Rajput gave an example of Bharat Singh, manager of Swahavan Society in Sagar district, who allegedly enrolled 19 members of his family as farmers and took more than Rs 33 lakh loans in their names and has now applied for loan waiver.

Comprising officials from revenue, agriculture and cooperative department, an inquiry committee has been formed in each district to investigate such cases. The committees submit their reports to the district collector, who then takes action like lodging of FIR and suspension of the accused.

The modus operandi

Co-operative minister Govind Singh said some staff members of co-operative banks had formed a nexus to get farm loans on 0% interest rate and then gave loans at a higher interest rate of 1.5-3% in the market.

“Organised nexus has been exposed where bank officials used the documents of poor farmers in a fraudulent manner, availed loans on 0%, gave it on higher rates in the market and then deposited it back in the bank before the end of the financial year. They minted money and never got caught. This was going on for more than a decade in several banks,” said Singh.

He said bank officials misused KYC documents like Aadhaar card and land documents given by customers to avail loans from three to four banks. “Such examples are aplenty in my region in Gwalior and Bhind,” said Singh. Similar reports are coming from Sagar, Katni and Rewa, he added.

Though the government has set February 5 as the last date for applying for loan waiver, the deadline could be extended on a case to case basis, said Singh.

The minister said 516 complaints have been received in the past five days with most of them coming from Sagar, Katni and the tribal-dominated Alirajpur.

Agar Malwa collector Ajay Gupta said an FIR has been lodged against the manager and assistant manager of Ganeshpura Society for a Rs 4 crore scam. Other societies in Maina, Kharaina, Gailana and Kasai Dehria in Susner are also being probed and action will be taken against them too, he said.

Agriculture welfare minister Sachin Yadav said there are several cases where documents of farmers have been used fraudulently to avail loans from more than one bank. “A big exposé is expected on completion of the inquiry,” said Yadav.

Govind Singh said that he has sought an amendment in the Co-operative Act. Properties of the culprits found guilty in the loan scam will be seized by the government once the amendment is made in the law, he added.