The farm loan waiver announced by the Central government has come as a boon to the District Central Cooperative Bank (DCCB), which is facing financial problems with bad debts amounting to Rs 200 crore. The DCCB is expected to get Rs 140 crore from the Central government under the farm loan waiver. The DCCB has been mired in bad debts for the last several years. It had been placed under Section 11 of the Banking Regulation Act, when its net worth reached a record low. As the National Bank for Agriculture and Rural Development (Nabard) denied refinance facility, the DCCB was forced to give only small amounts as loans to farmers with the meagre collections. Each and every ruling body taking over the reins of the DCCB used to give loans indiscriminately to its followers. Loan collection was stopped due to political pressure. Farmers could not repay loans due to drought and heavy rains. Even though small farmers repaid part of their loans, big farmers did not do so. In several cooperative societies, huge loans were taken by showing DKT lands as surety. DCCB officials could not auction the lands when loans were not repaid. In some other areas, there is a huge discrepancy between the rate of the hypothecated land and the loan amount. Some persons also took loans under benami names and failed to repay them. As almost all areas in the district have groups and factions, cooperative societies could not take up forcible recovery. Several cooperative societies are not in a position to give new loans. The number of cooperative societies in the district has reduced to 60 to strengthen the cooperative sector as per the report of the Swaminathan Committee. However, recovery of loans has never crossed 40 to 50 per cent. The Chief Minister, Dr Y.S. Rajasekhar Reddy, had sanctioned Rs 50 crore in 2007 to strengthen the DCCB as per the recommendations of the Swaminathan Committee. The aid helped the DCCB to a certain extent but could not pull out the bank from losses. DCCB officials are trying to recover loans to bring the bank out of the purview of Section 11. Recently, the ruling body of the DCCB urged the Chief Minister to release additional aid to help the bank. Weavers cooperative societies have to repay Rs 24 crore to the DCCB. The Kadapa cooperative sugar factory, the Proddutur milk factory, women's cooperative organisation and other organisations have to repay over Rs 30 crore.