CAG enters RBI terrain; starts auditing banks' farm debt waiver accounts

The Comptroller and Auditor General of India (CAG) on Monday said it has started auditing bank accounts relating to the Rs71,000-crore farm debt waiver scheme announced by the UPA government and will come out with an audit report.
 
"(CAG is examining) how effectively that scheme (Agricultural Debt Waiver and Debt Relief Scheme) was implemented...that was implemented through banks," said Vinod Rai, Comptroller and Auditor General on Thursday.

Rai said the report will not look into the merits or demerits of the debt-waiver scheme, rather it would look into the implementation of the scheme by public sector banks.

The CAG does not as a rule audit the accounts of banks, which is a function of the Reserve Bank of India (RBI), Rai said, adding that this would be an exception and the report would be handed over to the government once it is completed.

"We do not audit banks as it is done by the RBI and chartered accountants. But we decided to do this audit. So, now, we will look into the books of the banks also," he said.

The farm debt waiver scheme, implemented through banks and other financial institutions, was introduced in the wake of rising number of suicides among debt-ridden farmers. The scheme was expected to benefit around four crore farmers across the country.

The scheme is expected to have offered full debt relief to around three crore farmers owning land below five acres and partial relief to around one crore farmers with higher land holdings.