CM Vijayan asks banks not to deduct EMIs of landslide victims from relief funds

Thiruvananthapuram: Kerala Chief Minister Pinarayi Vijayan stated on Tuesday that banks in the state need to write off the loans they issued to the victims of the Wayanad landslide instead of deducting their Equated Monthly Installments, or EMIs, from interim relief funds.

In the Meppadi area of the district on July 30, landslides caused by intense rain resulted in the deaths of at least 308 people. The impacted families received compensation from the state government in the amount of Rs 10,000 each.

However, The Indian Express reported that a Kerala Gramin Bank office in Chooralmala was able to retrieve outstanding balances from the accounts of its loan recipients. Protests resulted from the deduction of EMIs of up to Rs 5,000 as soon as the relief funds were transferred into people's accounts.

As per The Times of India, Mini Mol, a woman who had taken out a bank loan of Rs 50,000, said that her relief payments had been reduced by Rs 3,000. A man from Chooralmala named Rajesh, who was affected by the landslide and whose house and livestock stable were destroyed, said that the bank had taken out Rs 3,400 from his relief funds, Scroll.in reported.

The chief minister asked banks to support his government's relief efforts by writing off the loans of impacted families during a meeting of the state's Bankers' Committee on Tuesday. Additionally, Vijayan stated that banks shouldn't count on the state to pay back any loans they decide to write off. According to The Hindu, the Wayanad district administration was also instructed by the Chief Minister's Office to submit a report on the issue.

According to The Times of India, Kerala Gramin Bank has been instructed by the Wayanad deputy collector, who also serves as the chief executive officer of the District Disaster Management Authority, to restore the sums that were deducted from the victims' accounts. VN Vasavan, the state minister for cooperatives, called the bank's action "cruel.”

“Even if the state-level bankers’ committee has not issued a formal directive in this regard, the bank branch manager could have approached the issue in a humanitarian manner at his own risk, which did not happen,” Vasavan told The Times of India. “It is definitely an indecent act, we will raise the issue with the SLBC [state-level bankers’ committee].”

According to The Times of India, the Centre owns a majority of the Kerala Gramin Bank, with 50% direct ownership and another 35% through the Public Sector Undertaking Canara Bank. The government of Kerala has a 15% stake in t

he bank.