RBI/2012-13/381
UBD. BPD.PCB. Cir. No. 31/13.05.000/2012-13

January 15, 2013

The Chief Executive Officers
of All Primary (Urban) Co-operative Banks

Madam/Dear Sir,

Performance Audit Of Agricultural Debt Waiver And Debt Relief Scheme, 2008

As you are aware, the Performance Audit of the Agricultural Debt Waiver and Debt Relief Scheme (ADWDRS), 2008 is being undertaken by the Office of the Comptroller and Auditor General (CAG). During the Exit Conference held with Officers of CAG on December 7, 2012, the following major observations were made with regard to implementation of the Scheme :

1. Ineligible accounts of farmers extended benefits under the Scheme. The audit has noted that to provide benefit to ineligible farmers, instances of tampering and over-writing, inadequate documentation, etc. had taken place.

2. Benefit was only extendable to farmers directly but in some cases loans extended to MFIs were claimed and disbursed.

3. Less/Excess benefit extended to eligible accounts.

4. Reimbursement of inadmissible charges to banks.

5. Non-issuance of Debt Waiver and Debt Relief Certificates.

6. Outcome relating to fresh loans not monitored.

2. In view of the above, the Government of India has desired that immediate corrective measures be taken by all the banks since the specific cases scrutinized by CAG and their observations thereon are already available with the banks. You are, therefore, requested to take following action in such areas :

3. Please ensure that the action, as indicated above, is completed within 15 days from the date of issue of this Circular and reported to the concerned Regional Office of Reserve Bank of India.

4. Please acknowledge the receipt to the Regional Office concerned.

Yours faithfully,

(A. Udgata)
Chief General Manager-in-Charge