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Archive for farm loan waiver

SHG’s to be included in the Farm Loan Waiver – 2008

Download the farm waiver package herefarm-loan-waiver-20081
The Indian Government has widened the scope of the farm loan waiver package. Finance minister P Chidambaram elaborated on the details of the new-look scheme on Thursday (19 June 08 )  to the country’s top bankers in a video conference.

As per fresh directions, all self-help groups (SHGs) of farmers are eligible for loan waiver even if disaggregated data of loan extended to each farmers of the group may not be maintained with branches. Banks offer loans to SHGs as group-loans, and therefore, no disaggregated data is maintained at branch level. Then, farmers who had availed of short-term gold loans for agricultural investment will be covered under the package.

However, the applicable interest to be waived will not be in excess of 7% in the corresponding year. Farmers who took direct agriculture investment loans for buying farm equipment like harvesters and combine will be entitled for waiver of loans.

In all these cases, farm loans overdue on December 31, 2007 and which remained unpaid until February 29, 2008, are eligible for both loan waiver and debt relief scheme.

However, the number of additional eligible farmers is not readily available. Banks have instructed their respective branches to review the list. The ministry of finance has elaborated on the details following queries raised by banks. “We’ve asked our officials to act accordingly. The finance minister has complimented the efforts of branch level people. However, the branch level officers need to put a few more days’ of hard work,” a top bank executive said.

In the circulated note, the ministry has clarified that Hindu undivided families will be covered under the package, although proprietary firms are excluded from the list. Farmers, who took short term production loans for sugarcane and banana cultivation will be covered under the scheme.

Interestingly, the ministry has also instructed banks to include insurance premium debited in the loan accounts in the eligible amount.

It categorically said: “The scheme does not apply to any loan disbursed by lending institutions prior to close of business on March 31, 1997.”

This cut-off date will, however, not apply to loans restructured and rescheduled by lending institutions in 2004 and 2006 through special packages and in the normal course as per RBI guidelines.

 

 

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