On Monday, Usha Thorat, deputy governor of Reserve Bank of India said that the central bank will issue further instructions for operationalising the farm loan waiver scheme.
Talking about the expanded loan waiver scheme, Thorat said that it would be the government and not the bank who would bear the burden of the loan waiver scheme.
Thorat was speaking on the sidelines of the 61st annual general meeting of Indian Banks’ Association in Mumbai.
On the non-performing assets in the farm loan sector, Thorat said that the central bank has maintained the data on NPAs across all sectors.
“It’s not a strange and unusual about NPAs. They have been happening and accumulating all over the years,” she said.
During the budget for 2008-09, Finance Minister, P. Chidambaram offered Rs 60,000 crore debt package comprising waiving all loans overdue as on December 2007 for small and marginal farmers owning less than 2 hectares land and a one-time settlement for large farmers. The Union Cabinet last week decided to increase the size of the farm loan waiver scheme to Rs 71,680 crore..
In order to improve the effectiveness of the lead bank scheme as announced in mid-term review of October 2007, a high level committee headed by Usha Thorat with members drawn from various financial institutions, banks and state governments was constituted to review this scheme. The committee has so far held seven meetings.
Thorat said that they have received good responses and a lot of ideas from the state governments and NGOs regarding this matter. The committee is expected to submit its report by July 2008.
Talking about the opening of a branch account with a bank, Thorat pointed out that today; it’s tedious for many people to open an account with a bank.
“It is a hurdle for many people to open a bank account even today. Not every bank branch today offers a no-frills account or a basic banking account,” she said.