Settlement scheme for distressed dairy farmers in Punjab

Punjab government is offering a One Time Settlement (OTS) scheme to dairy farmers who have failed to repay loans taken from central cooperative banks.
The announcement today comes after the state dairy farmers requested the state government to introduce OTS scheme to bail them out of financial distress owing to pending loans.
An official spokesperson said the objective of the OTS for dairy farmers was to provide reprieve to borrowers who had taken loans from central cooperative banks and were unable to repay their dues due to certain compelling circumstances.
The said scheme would cover all dairy loans which had become Non Performing Assets as on or before March 31, 2010.

The scheme would also include where cases have been filed and also the cases where decrees have been obtained.
After the settlement was reached, the central cooperative banks may take appropriate steps for closure of such cases in respective courts.

However, the scheme would not cover cases of fraud and wilful defaulters, he said.
Divulging the details of concession under settlement formula, the spokesperson said where the amount of loan advanced was more than Rs 50,000, simple rate of interest at a rate of 10 per cent per annum would be charged from the date of asset becoming NPA in the books of the bank.

Likewise, where the amount of loan advanced was up to Rs 50,000, simple interest at a rate of 8 per cent would be charged from the date of asset becoming NPA in the books of the bank.
Provided that the total interest charged should not exceed the principal loan amount advanced to him. However, there would be no concession regarding payment of principal amount, he said.
At least 25 per cent of the settlement amount would be paid upfront and the balance amount could be paid in 30 days or in installments, he said.
In case the balance amount was paid in a period of 30 days, then no interest should be charged on it up to 30 days from the date of settlement.