SLBC directs lenders to rejig loans of calamity-hit farmers

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Bhubaneswar, Dec 5: State Level Bankers’ Committee has instructed the State Controlling Heads of commercial banks to issue instructions to branches in the districts by December 7 to restructure or reschedule loan accounts of affected farmers to alleviate their plight.
The committee passed the instruction at a meeting of the subcommittee of SLBC on Agriculture Credit at Rajiv Bhawan Conference Hall under the Chairmanship of Principal Secretary to state Agriculture & Farmers’ Empowerment, an official release stated.
The release said the banks are to sanction Rs10,000 as consumption loan to beneficiaries affected by natural calamities in accordance with RBI guidelines. The SLBC has also instructed banks to report action they have taken until December 15 for review at the 149th SLBC Meeting likely to be held December 21.
On the restructuring of loans, the repayment period of restructured loans may vary depending on the severity of calamity and its recurrence, the extent of loss of economic assets and distress causes.
Various aspects of the RBI guidelines pertaining to relief measures to be provided by banks to beneficiaries affected by natural calamities were discussed. It was also discussed that the bank may allow a maximum period of repayment of up to two years (including the moratorium of 1 year) if the loss is between 33 and 50 per cent and to a maximum of 5 years (including the moratorium of one year) if the crop loss is 50 per cent or more.
The committee also stated bank should grant fresh Crop loan to the affected People based on the scale of finance for the crop and area under cultivation. The rescheduling process must be completed within 3 months of the notification of natural calamity. The committee also discussed that all short-term loans, except those which are overdue at the time of occurrence of natural calamity, should be eligible for restructuring. The principal of the short-term loan as well as interest due for repayment in the year of occurrence of natural calamity may be converted into term loans.

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