Mounting farm sector default on account of last years' debt waiver scheme has prompted the West Bengal State Cooperative Bank (WBSCB) to extend the repayment period for the current Rabi season loan till the end of this month.
Normally, Rabi season loans are repaid by the end of December.
According to Samir Ghosh, chairman of WBSCB, the extension will lead to better recovery, as farmers will be able to sell their produce by January end.
In West Bengal, farmers generally take short-term crop loan in the Rabi or winter season is for potato cultivation in the months of September-October.
WBSCB will also request agriculture credit societies and district cooperative banks to extend the repayment date from December to January.
The bank is also pushing the Centre for extending some relief to crop loan borrowers for the year 2007-08, as of the eight lakh borrowers, half defaulted repayment in the year.
The WBSCB had also decided to waive the penal interest of four per cent, over and above seven per cent, on about four lakh defaulters. Last year, the total short term credit disbursed by cooperative banks as crop loan in the state was Rs 947 crore and the outstanding dues were Rs 440 crore. The sudden rise in default was in anticipation of extension of debt waiver scheme to the year 2007-08, Ghosh.
Earlier, the bank had appealed to the Union finance ministry to extend the debt waiver scheme, so as to give some relief to the borrowers who had taken crop loans after March 2007. The Central debt waiver scheme, at a cost of Rs. 71,680 crore, was applicable to borrowers who had taken loans up to March 2007.
The total demand for the short term cooperative credit in West Bengal was about Rs 551 crore, from 6.4 lakh defaulting borrowers. About Rs 308 crore, or 56 per cent of total dues, had been made available to the state cooperative banking sector.
This year, the total short term cooperative credit in West Bengal has been pegged at Rs 1,450 crore.
