The Chennai headquartered Indian Bank has started rescheduling and restructuring agricultural loans disbursed to farmers based in drought hit areas.
In a statement the Chairman and Managing Director of Indian Bank, Mr. T M Bhasin said,"We are rescheduling and restructuring loans wherever district administration is saying (to banks)...In Indian Bank we have already started (wherever district administration is saying)." He further mentioned that in accordance with RBI guidelines, the bank has decided not treat farm loans in drought affected regions as Non Performing Assets and instead their repayment is being transferred to the next cropping cycle.
Mr. Bhasin added, "We are even funding for second crop cycles (to farmers) and then consolidated liability of farmers will be taken into account for recovering dues (from farmers) in next crop season".
Out of the total loans disbursed by the public sector bank, its agricultural loans account for about 18.5 percent.
Adding that the bank's NPAs in farm loans segment is a matter of concern, Mr. Bhasin also said, "Out of bank's Gross NPA's of 1.66 per cent as on June 30, 21 per cent is NPA to agriculture. If we compare with 18.5 per cent (farm loan), you will slightly find it is more than the other sectors."