Investigations into the multi-crore farmer’s crop loan scam that has rocked Madhya Pradesh have found that the scam was made possible by the connivance of various district cooperative bank officials, panchayat secretaries and supervisors in-charge of the verification of loan cases, officials said.

For years, loans were being taken fraudulently in other people’s names all over the state, but the maximum number of cases running into millions of rupees have been reported from the Gwalior-Chambal and Bundelkhand region with fresh cases being disclosed every day. Officials say they can’t pin an exact figure to the extent of the fraud yet but that in Gwalior alone, the damage is almost Rs 1.2 billion.

“A Special Investigation Team has been formed and 10 case registered against cooperative societies so far. But that number is going to increase,’ said Gwalior collector Bharat Yadav. “We have found evidence that loans had been taken in the name of non-farmers and dead persons . In Sagar, we came to know that loan was taken in the name of a former MLA too.”

The fraud came to light on the heels of the announcement of loan waivers under the Jai Kisan Fasal Rin Maafi Yojna (JKFRMY), when farmers who had not taken loans, spotted their names on the list of debtors being pasted in village panchayats.

Requesting anonymity, a former chairman of a cooperative bank explained how the fraud took place, “The scam happened on a large scale due to a flaw in the system. Most of the farmers keep their land and other documents with the panchayat secretary. Together with the bank official and bank loan supervisor, the secretary would use the documents to generate normal credit limit (NCL) slips which determine the eligibility of farmers for crop loans. Since the verification is in the hands of the supervisor, the persons on whose names the loans were taken, never came to know. In many cases the panchayat secretary took part of the loan in cash and the remaining was put in a newly -created account and then withdrawn. It is also true that in some cases, loans were returned too. But the fraud increased when interest rates dropped from 14 per cent to 3 per cent and then to zero per cent. People started taking loans for non-farming activities too.”

Advocate Varun Dev Sharma from Gwalior said, “I have no connection with my village for the past two decades but my name appeared on the list of debtors. More shocking was the fact that my late mother Kashibai’s name turned up on that list.”

Cooperatives department principal secretary Ajit Kesari said, “We have now devised a fool proof system to check all frauds and to ensure that only genuine persons get loan waivers.”

Kesari said farmers now have to fill out three colour-coded forms : green for famers who have linked their bank accounts with their Aadhar cards, white for those who are yet to do so and pink for those raising an objection.

Kesari said that complaints of loans in lakhs of rupees showing as a mere Rs 15-25 against names too, are being addressed by the pink form and collectors heading district committees will be on hand to check all irregularities.

First Published: Jan 23, 2019 22:30 IST