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The Reserve Bank of India (RBI) has written letters to Andhra Pradesh and Telangana governments indicating its willingness to consider a three-year relief for repayment of crop loans availed only during the last kharif season by farmers of both the states, government sources said here today.
The offer includes moratorium on payment in the first year and repayment of the entire loan along with interest in the remaining two years, according to the sources.
When contacted, the representatives of local banks said they were yet to receive any information in this regard.
According to officials engaged in the loan waiver/reschedulement exercise in both the states, the banking regulator also sought to know if the governments would be able to back this plan. The RBI also made it clear that the gold loans, even if taken for agriculture purpose, would not be considered under the scheme.
The RBI’s offer falls short of the AP government’s demand for a five-seven-year reschedulement period for all the loan dues, including gold loans. The AP government is writing a letter to the RBI specifically asking for extending the relief to gold loans as well, the officials said.
The response of Telangana government was not immediately known as the meeting of the state Cabinet, which intends to discuss the farm loan waiver among other things, was still on by the time of going to press today.
In a subtle variance of approach towards the farm loan issue, the AP government was giving more stress on loan reschedulement owing to a much larger financial liability arising out of its loan waiver promise while the Telangana government was talking more of a waiver as it considers too much dependence on loan recast would mean more financial burden either on farmers or on the government.
Short-term agriculture loans amounting to around Rs 9,000 crore are expected to be covered under the reschedulement programme in AP if the loans taken in the last kharif season alone are considered for the reschedulement, according to the officials. The banks, however, would have to reverse the interest booked on these loans. The fate of the balance loan dues would be known only after the governments come out with a clear eligibility criteria for their loan waiver promise, bankers said.
