The Maharashtra govt has taken a decision to abolish all cooperative land development banks. The banks have to pay the govt a whopping amount of Rs. 1,700 crore in guarantees against loans given to 37 thousand farmers.
The govt would take-over the properties belonging to these banks across the state.
The banks had long been facing serious financial difficulties due to non-recovery of loans and had lost the capacity to return Rs. 1,700 crore to Nabard.
In addition the banks were not able to carry out other essential financial obligations. Under the circumstances, the state govt felt had no choice but to abolish them.