Earlier, the bankers told Chidambaram that they were facing liquidity crunch due to delay in the relief package, and were unable to provide credit to farmers. On this, Chidambaram said due to delay in Parliament session, supplementary demand of grants could not be passed. The RBI and NABARD have been asked to look into the matter so that banks do not face fund shortage for advancing loans to the farmers, he said.
They asked the government to compensate banks by providing interest on the loans waived off, as they had to pay interest to their lenders for that period.
The bankers were concerned that though the farms loans have been written-off as on March 31, 2008, they have still to get funds from the government.