Thiruvananthapuram: Revenue Minister K. Rajan has announced that the Kerala government will take over the outstanding debts of victims affected by the Chooralmala disaster, offering significant financial relief to those struggling to recover from the tragedy. According to the minister, the state will assume loan liabilities amounting to ₹18.75 crore, with the required funds being released from the Chief Minister’s Relief Fund.
The minister stated that a special committee has been constituted to determine beneficiary eligibility and to ensure transparency in the process. Individuals with grievances regarding inclusion or exclusion can submit complaints before the committee for review. The government’s intervention aims to ensure that genuine victims are not left burdened by debt in the aftermath of the disaster.
As part of the decision, the state will take over loans in addition to those already written off by Kerala Bank. The government will reimburse Kerala Bank the ₹93 lakh that had been waived earlier. In total, 1,620 loans availed by 555 beneficiaries will be settled under the scheme, covering individuals from six different sectors impacted by the disaster.
Minister Rajan said the state government’s move comes in the wake of the Central Government’s refusal to waive the loans, despite having the option to do so. He criticized the Centre’s stance as vindictive towards Kerala and described it as an inhumane approach towards disaster victims who are already facing severe hardship.
The controversy follows an affidavit filed by the Central Government in the High Court stating that it would not waive bank loans of the Mundakai–Chooralmala disaster victims. The affidavit, submitted by the Union Home Ministry, maintained that there is no existing provision for a loan waiver and that such matters fall outside the jurisdiction of the Central Government.
Citing Reserve Bank of India policies, the affidavit noted that there is no provision for a complete waiver of bank loans in disaster-affected areas. It further stated that, as per the understanding reached at the 2015 Bankers’ Conference, neither the Central Government nor the Reserve Bank has the authority to interfere in the day-to-day operations of banks. According to the affidavit, the RBI’s role is limited to permitting moratoriums, not granting full loan waivers.
Against this backdrop, the Kerala government’s decision to shoulder the debt burden has been positioned as a humanitarian intervention, aimed at restoring dignity and financial stability to families devastated by the Chooralmala disaster.