Banks to re-schedule loans for small farmers in Maharashtra

Mumbai, Aug 3 | Updated: Aug 4 2005, 06:03am hrs
In view of the huge losses caused to the people due to unprecedented rains in Maharashtra, the state level bankers committee (SLBC) has announced rescheduling of loans for the small and marginal farmers.

State Bank of Indias chairman, AK Purwar said, The banking system will do its place to provide relief to the affected people. The SLBC has decided on a moratorium period of two years and extended the repayment period by five years.

Also, in case of urban areas, loans upto Rs 50,000 and Rs 25,000 in rural areas will have zero percent interest rate. For the small businesses, in urban areas, the SLBC will consider an additional loan component to help them start new businesses.

For loans exceeding Rs 50,000, the interest rates will be lowered to 7% from the earlier 9%. This would be a time-bound programme to be completed within 15 days of application by the concerned person to the bank.

This will be called as a composite loan package. The consumption loan would be extended as per prevailing directives of the Reserve Bank of India. With respect to insurance claims, the same would be settled with minimum formalities and procedures would be followed on similar lines of Gujarat and tsunami calamities and insurance premium will be paid immediately on behalf of affected farmers.

The insurers also plan to form a committee to work out the losses to the people from their lost houses.

Mr Purwar added that although interest rates will remain stable in the short run, considering global interest rates and increasing oil prices, it would be difficult to predict what rates would be like in the medium term.