Banks can give more comforts to farmers: RBI
Public sector banks have been authorised to give more relief to farmers under the debt relief scheme, provided the lenders do not ask the Government to bear the losses.business Updated: Jun 26, 2009 13:59 IST
Public sector banks have been authorised to give more relief to farmers under the debt relief scheme, provided the lenders do not ask the Government to bear the losses.
Under the debt relief scheme, called One Time Settlement (OTS), farmers were given debt relief to the extent of 25 per cent of their loans, if they pay 75 per cent of their debt to the banking sector. The scheme is for loans that were overdue on December 31, 2007 and remained unpaid until February 29, 2008.
Now the Government has allowed banks to receive even less than 75 per cent of these loans from farmers, provided they do not seek the Government help in this regard, the Reserve Banks said in a notification here.
"The Government of India has advised that the banks/ lending institutions are allowed to receive even less than 75 per cent of the eligible amount under OTS provided the banks/ lending institutions bear the difference themselves and do not claim the same either from the Government or from the farmer," the central bank said.
The Government will pay only 25 per cent of the actual eligible amount under debt relief, the Reserve Bank said.
The Government also made some more changes in the original OTS scheme.