The farmers in Maharashtra's Parbhani district, in whose names a sugar mill fraudulently borrowed money from banks, would still be eligible for fresh loans, the state government assured today.

Minister of State for Home Deepak Kesarkar made the statement in the Legislative Assembly after Congress MLA Sunil Kedar raised the issue.

Parbhani-based Gangakhed Sugar and Energy Ltd borrowed Rs 328 crore from Andhra Bank, Uco Bank, United Bank of India, Bank of India, Syndicate Bank and private-run Ratnakar Bank by submitting loan applications in the names of some 12,000 farmers without their consent, Kedar said.

He demanded action against the sugar mill as well as the bank officials.

"If bank officials are found guilty, they will face legal action," Kesarkar said.

"Names of 12,951 farmers were used to take loans. The seven-twelve land title documents of these farmers do not have mention of these loans, so they will be eligible for fresh loans from banks," the minister said.

Seven-twelve or "saat-bara" extract is a document maintained by the Revenue Department for agricultural land which contains information such as survey number and owner's name. If the owner has taken a bank loan, it is also recorded in this document.

It is alleged that the sugar mill took loans in the names of farmers who are its members. The Economic Offences Wing of state police is probing the case.