Leading bankers on Friday welcomed the Union Budget 2010-11, in particular the measures on farm loan repayment, capital infusion into PSBs and interest rate subventions to needy sections, saying that these would make the system healthier.
The Government today extended the period for farm loan repayment till June 30, 2010, providing more time for banks to recover advances and thus reduce their bad-loans. It also announced an infusion of around Rs 16,500-crore into weak PSBs next fiscal.
State Bank of India's Chief Financial Officer, S S Ranjan, said that the budget was growth-oriented and has brought cheers for the banking industry, particularly by way of capital infusion into weak banks and extending the repayment period.
"Giving more time for farmers to repay loans is definitely good news for banks as this will provide more time for banks for recovery and thus help reduce chances of more defaults," Ranjan told PTI here.
The Government also raised the interest rate subvention of crop loans from one per cent to two per cent and decided to continue the rate subvention for certain exports categories for one more year.