Wayanad’s Disaster: Centre Refuses Loan Waiver for Landslide Victims

Kochi: The Union government has informed the Kerala High Court that loans taken by individuals affected by the Wayanad landslides in July 2023 will not be waived. Instead, the relief measures will be limited to loan rescheduling and restructuring as per the Reserve Bank of India’s (RBI) Master Directions on Relief Measures for Natural Calamities.
The submission was made in an affidavit filed by the Union Finance Ministry in response to a query from the High Court. A division bench comprising Justices A K Jayasankaran Nambiar and P Gopinath is hearing a suo motu public interest litigation initiated in the aftermath of the disaster, which aimed to examine disaster preparedness and relief mechanisms in the state.
According to the affidavit, a special meeting of the State Level Bankers' Committee (SLBC) was held on August 19, 2023, and attended by Kerala Chief Minister Pinarayi Vijayan. The committee decided to extend the standard relief measures in accordance with RBI norms, which include a one-year moratorium on existing loans, restructuring of loan accounts, and provision for fresh loans where necessary.
The landslides, which struck the Mundakkai and Chooralmala regions of Wayanad on July 30, 2023, resulted in the loss of over 200 lives, injured hundreds, and left 32 persons still missing. Entire settlements were destroyed, prompting the High Court to take cognisance of the scale of the disaster and question whether additional financial relief, including loan waivers, could be considered.
The Centre, however, maintained that the RBI’s existing framework was adequate and that no provision for a blanket loan waiver was being contemplated. While the state has provided immediate rescue and rehabilitation support, the Centre’s affidavit confirms that relief will remain within the bounds of existing financial policy.