The Reserve Bank of India has directed the banks to extend the time limit on loan repayment, for borrowers owning poultry units, by the end of April.
The decision was taken to provide some relief to the poultry industry, which has been badly hit by bird flu in some states. Along with West Bengal, which is, one of the worst affected, preventive measures are also being taken in neighbouring states of Bihar, Jharkand, Assam and Orissa.
RBI has asked the banks to convert the principal and interest on working capital loans into term loans and also convert the installments and interest on term loans further into term loans.
The banks have been directed to reschedule the repayment of both working capital loans and term loans in installments after assessing the income generating capacity of the borrower’s poultry unit over the next three years. The banks have been asked to fix the first year of repayment after a gap of atleast one year, giving time to the borrowers to recover from their losses.
RBI stated that the banks should treat the converted loans as current dues after which the poultry unit is eligible for fresh loans. The rescheduling of loan repayment is only valid for those loans that had to be repaid after December 31, 2007, after the bird flu started.
To help the farmers and poultry units affected by the bird flu, the Agricultural Ministry has plans to announce two packages.