Offer one-time settlement of loans to farmers: Punjab FM Manpreet Badal to banks | punjab | Hindustan Times
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Offer one-time settlement of loans to farmers: Punjab FM Manpreet Badal to banks

For offering one-time settlement, members of the state level bankers' committee (SLBC), comprising private and nationalised banks, agreed to seek permission of their respective board of directors.

punjab Updated: Jul 26, 2017 09:34 IST
HT Correspondent
Punjab’s farming sector outlay this fiscal is Rs 10,581 crore, 9% of the total budget of Rs 1.18 lakh crore for the state.
Punjab’s farming sector outlay this fiscal is Rs 10,581 crore, 9% of the total budget of Rs 1.18 lakh crore for the state. (HT File Photo)

Punjab finance minister Manpreet Singh Badal on Tuesday met representatives of national and private banks and requested them to offer one-time settlement to marginal and small farmers who owe crop loans.

The meeting, held at Punjab Bhawan, also discussed the modalities of waiving off Rs 2 lakh each, of 10.25 lakh small and marginal farmers. Sources said Manpreet also requested banks to cooperate in sharing name and account details of farmers who are to be covered under the scheme.

For offering one-time settlement, members of the state level bankers' committee (SLBC), comprising private and nationalised banks, agreed to seek permission of their respective boards of directors.

"The banks usually offer one-time settlement to write off outstanding loans. So, the state government has requested them to consider giving that option to farmers," sources in the finance department said.

For sharing account details of farmers, the banks would also need authorisation of individual farmers and of the Reserve Bank of India (RBI). 

Punjab finance minister Manpreet Singh Badal (HT File Photo)

While banks said they would initiate the process of seeking permission from individual farmers, chief minister Captain Amarinder Singh along with Manpreet had met Union finance minister Arun Jaitley last week to request him to give directions to the RBI to allow banks to do so.

Since crop loan recoveries of cooperative banks have taken the worst hit, with farmers defaulting in anticipation of the waiver, the state government will first have to bail out the Punjab State Cooperative Bank and its subsidiaries in districts. This will help these institutes avail refinance from the National Bank for Agriculture and Rural Development (NABARD) for the Kharif season. 

The government has decided to raise Rs 10,000 crore term loan by standing guarantee for the Rs 3,600 crore worth loans due to cooperative banks and Rs 6,000 crore due to nationalised and private banks on account of crop loans by the beneficiary farmers.