Clarification on Performance Audit Of Agricultural Debt Waiver And Debt Relief Scheme, 2008 and Subsequent Monthly Reporting needs of RBI

RBI/2012-13/432
UBD.BPD (PCB) Cir. No.40/13.05.000/2012-13

March 7, 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

Please refer to our Circular UBD. BPD (PCB) Cir. No. 31/13.05.000/2012-13 dated January 15, 2013 on the above subject. Considering the serious nature of observations made by the Comptroller and Auditor General, it has been, inter alia, desired by the Government of India that:

The beneficiaries™ lists need complete verification with priority being given to areas where indebtedness was high.

Administrative/accounting lapses on the part of the officials, internal auditors and statutory auditors who were responsible for verification, certification, or for passing the claims be identified and accountability fixed for the lapses. Action needs to be initiated and full responsibility be fixed at the earliest with no exceptions.

Cases of extending of benefits to ineligible beneficiaries must be dealt with on top priority and full recoveries as per law must be made to ensure no loss to the exchequer. It will be the personal responsibility of the institutional heads to ensure that such recoveries are effected in full.

All cases of tampering of records or alteration, etc. must be identified and scrutinized by higher authority. A decision on each such case in the form of speaking orders must be taken. Stringent action under relevant sections of law against those responsible must be initiated. This would be monitored by the Board of Directors / Administrators /CVOs, as the case may be, of the concerned institutions regularly.

Debt Waiver/Debt Relief certificates must be issued in all eligible cases immediately and full records of such issuance may be kept ready for inspection.

A list of eligible beneficiaries who were not extended benefits also be drawn up and may be examined qualitatively to establish the reasons for such denials. Action may be initiated in all cases where malafides or carelessness appears likely.

2. We are enclosing a format for monthly reporting with respect to the above issues. The information in this format may please be forwarded to the concerned Regional Office of Reserve Bank of India latest by 25th of every month to enable us to apprise Government of India accordingly.

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

Yours faithfully,

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

Encl.: As above.

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Circular of January 15, 2013

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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 :

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