CAG to examine books of banks and financial institutions in loan waiver scheme

CAG to examine books of banks and financial institutions in loan waiver scheme

SHIMLA: The Comptroller and Auditor General of India (CAG) will examine books of banks and financial institutions involved in the UPA government’s mega loan waiver scheme announced two years ago.

The move aims to evaluate the effectiveness of the scheme that provided relief to nearly four crore farmers of the country.

“We do not audit accounts of banks. But we have decided to go for this audit in case of banks involved in the implementation of the loan waiver scheme,” the Comptroller and Auditor General of India (CAG) Vinod Rai said.

The CAG’s audit into the functioning of the banks is unique in the way that the CAG is not mandated to audit accounts of banks, which falls under the supervision of the Reserve Bank of India and is done by empanelled chartered accountants registered with the Institute of Chartered Accountants of India.

Speaking to reporters at the diamond jubilee celebrations of the National Academy of Audit and Accounts in Shimla, he said that the CAG’s role in this case will be to look into the implementation aspect of the debt waiver scheme, adding that his institution will not comment on the government’s policy.

The UPA government had in its 2008 budget announced a nearly Rs 71,000 crore farm loan waiver scheme to offer relief to about three crore farmers and giving partial relief to another one crore.

Under the scheme, marginal farmers cultivating crops in agricultural land of up to five acres got full debt waiver on their short-term crop loans. Other farmers, owning more than five acres of land, received one-time settlement relief through the payment of a portion of the debt.

The scheme, which was for a limited period of 30 days, closed on June 30, 2008. The debt relief scheme was, however, extended by six months till June this year due to natural calamities. The scheme is being implemented through banks and other financial institutions.


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