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,
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:
i. 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.
ii. Benefit was only extendable to farmers directly but in some cases loans extended to MFIs were claimed and disbursed.
iii. Less/Excess benefit extended to eligible accounts.
iv. Reimbursement of inadmissible charges to banks.
v. Non-issuance of Debt Waiver and Debt Relief Certificates.
vi. 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 :
Sr.No | Audit Observation | Remedial Measures |
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. | (i) Recovery of such money from such ineligible beneficiaries. (ii) Fixing of responsibility of bank officials as well as auditors. (iii) Considering lodging of FIRs in cases of tampering of records. |
2. | Benefit was only extendable to farmers directly but in some cases loans extended to MFIs were claimed and disbursed. | (i) Fixing of responsibility of the officials responsible for such disbursal. (ii) Recovery of such money. |
3. | Less/Excess benefit extended to eligible accounts | (i) Recovery in cases of excess payment. (ii) Fixing responsibility of banks’ officials as well as auditor responsible for such act. |
4. | Reimbursement of inadmissible charges to banks. | (i) Recovery of such money (ii) Fixing of the responsibility of claimant institutions and disbursing officials. |
5. | Non-issuance of Debt Waiver and Debt Relief Certificates. | (i) In cases where such certificates have not been issued, these should be immediately issued. This should be completed by February 28, 2013. |
6. | Outcome relating to fresh loans not monitored. | (i) Such monitoring should be immediately undertaken in respect of beneficiaries granted relief under the Scheme. |
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
Audit compliance obligations: banks must recover inadmissible payouts, fix official responsibility, issue certificates and monitor post-waiver lending. The audit of the Agricultural Debt Waiver and Debt Relief Scheme, 2008 found benefits extended to ineligible accounts, claims on loans to intermediary MFIs, incorrect benefit amounts, reimbursement of inadmissible charges, non-issuance of waiver certificates and lack of monitoring of fresh loans. The Reserve Bank requires banks to recover inadmissible or excess payments, fix responsibility of officials and auditors, consider FIRs where records were tampered with, issue missing waiver certificates promptly, and begin monitoring outcomes for beneficiaries, and to report completion to the regional office.
TaxTMI 
AI Drafter ✕
TaxTMI 
