Co-op banks of the three states are going to be hit as the newly elected CMs of the three states have decided to waive off short term farm loans.
The chief minister of Madhya Pradesh Kamal Nath and that of Chhattisgarh Bhupesh Bhagel waived the outstanding short term crop loans of farmers as soon as they began their jobs.
Loan up to Rs 2 lakh outstanding till March 31, 2018 either from cooperative bank or from nationalised banks were waived off on Monday. This is going to cost Rs 40,000 cr to Madhya Pradesh exchequer.
In Chhattisgarh CM Bhagel also announced that government will waive farm loans worth Rs 6,100 crore of around 1.66 million farmers. He also announced increase in the MSP for paddy from Rs 1,700 per quintal to Rs 2,500 a quintal.
Experts, however of the view that waiving loan is no solution to farm crisis. Ex RBI Governor Raghuram Rajan is dead against such move.