NEWS & ADVICE : PERSONAL LOAN
FM asks banks to expediate farm loan waiver
By Neelima Shankar
Jun 3, 2008
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Taking a step in the right direction, the Union Finance minister P Chidamabaram has asked banks to expedite implementation of the farm loan waiver package and complete the scheme by June 30. This step is important at the moment as the plantation of Kharif crop is very near, and Chidambaram hopes to help most of the farmers clear their defaulters’ tag before that.

Speaking at a meeting with bankers at the Reserve Bank of India headquarters in Mumbai, Mr Chidambaram, he discussed the code of commitments to micro and small enterprises released by the Banking Codes and Standards Board. He also spoke to them on the speedy implementation of the debt waiver package announced in the budget in February this year, at the meeting that lasted for about half an hour.

“He asked bankers that the scheme should implemented transparently and avoid any discrepancy and in order to ensure that it happens smoothly and expeditiously, there should be very senior level involvement to oversee the debt relief operations,” said a bank chairman. Bankers were also directed to translate the scheme in the local language and to be displayed at the branch. They were advised to clearly list the beneficiaries and that nobody should be excluded inadvertently.

A farmer is not eligible for fresh loans for the new season, unless he has his dues cleared, and hence the rush in clearing the scheme early. At the brief meeting, the FM reminded banks that they were duty bound to lend to the micro and small enterprises which have no access to formal credit and often rely on money lenders who charge them at very high rates.

He said, "We have made significant progress as far as agriculture sector is concerned, in education, loans to industry and in the last few years to self help groups. But we have not yet been able to reach the micro and small enterprises."


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