The decision was announced in the first Karnataka cabinet meeting, chaired by him.
The move comes as a 'Brahmastra' amid the ongoing skirmish between the BJP and the Congress-JD(S) alliance.
Karnataka CM Yeddyurappa announces loan waivers for farmers
I had promised the farmers: Yeddyurappa
"I had promised the farmers...that I will waive loans up to Rs 1 lakh in nationalised banks. I have informed the same to the Chief Secretary... And I will fulfill my promise by tomorrow or day after," Yeddyurappa told reporters.
BJP's mandate is yet to be proven
The Congress-JD(S) alliance had moved the Supreme Court last night after Governor Vajubhai Vala invited BJP's Yeddyurappa to take oath as the Chief Minister of Karnataka.
However, the alliance said that the Governor's decision was unconstitutional for choosing the BJP, that is 7 seats short of 112 required, to form the government. The alliance, with 116 seats, already has the majority.
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Meanwhile, RaGa thinks situation in Karnataka is similar to Pakistan
Meanwhile, earlier today, at a rally in Raipur, Chhattisgarh, Congress President Rahul Gandhi said such things happen in Pakistan. He has launched a full-blown attack on BJP after Yeddyurappa was sworn in as Karnataka Chief Minister.
Gandhi said, "RSS is making way into all institutions in the country... Aisa Pakistan ya tanashahi mein hota hai (such things either happen in Pakistan or dictatorship)."