FM sees the farmers in the election year Friday, Feb 29 2008 

Finance Minister P. Chidambaram-- PIB photoBetter late than never. The Finance Minister P. Chidambaram has announced loan waiver of Rs. 60000 crores benefiting more than four crore farmers.

It took several years for the government to see that farmers are committing suicide in Kerala, Maharastra, Andhra Pradesh and elsewhere in the country. And it needed an election year and shortfall in food production to force the Finance Minister to announce the waiver. It is surprising that the country waited till now to act.

It is unjust that the Minister has limited the largesse to defaulters. Many farmers would have paid their dues tightening their belts. They also need assistance.

It is not yet clear whether the exchequer would bear the burden of the relief or would pass it on to the banks. If the Finance Minister does that, it would hit the balance sheets of bands very badly. However, it is to be remembered that industries across the country have defaulted a bigger sum and the amount is as good as written off.

It is, however, better for Finance Ministers not to tinker with the credit system. If he is passing on the burden to the banks, he should also see to it that credit to the farmers does not come down in the coming years. Farmers should not be placed at the mercy of moneylenders after the write off.

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After hartals, virtual banking holiday in Kerala Monday, Feb 25 2008 

sbthq.jpgAfter two days of hartal— first called by the United Democratic Front to protest against the price rise and the second by the traders themselves to protest against retail chains, the people of Kerala would be subjected to two days of closure of one of the leading banks of the State.

The employees of State Bank of Travancore (SBT), a subsidiary of State Bank of India (SBI), go on strike for two days (February 25 and 26, 2008) in protest against the proposal to merge it with SBI. Unions of other public sector banks and some small private sector banks join them across the country with common demands such as revision of wages.

The SBI is trying to increase its capital base through a rights issue and amalgamation of its subsidiaries to meet global competition. Neither the employees unions of SBT nor others have come out with solid grounds for their opposition to the merger. The Kerala Government is also silent.

The loss of their prominence seems to be major concern of the union leaders and higher ups in the Bank. The employees stand to benefit as their salaries are bound to go up with merger with SBI.

SBT has the largest branch network in Kerala. The presence of SBT with its headquarters in Trivandrum had helped higher penetration of banking into rural areas. Considerable agriculture credit also flows from the Bank. This push may not continue after merge. Some branches may even be closed down owing to redundancy. A major concern for Keralites would be flow of money out of the State.

The banks in Kerala, flush with deposits from the Gulf countries, had been maintaining a low credit deposit ratio. Several of the banks including the SBI used to siphon off funds to Northern States on the ground that there were no viable projects for large-scale lending in Kerala.

Update: Strike postponed following talks

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Hartals galore in Kerala

Hartals, the weapon of bankrupt political parties

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UDF hartal affects normal life in Kerala
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We hate hartals

CPI takes on retail chains
Indian Banks