State Bank of India (SBI) today announced a one-time farm loan settlement scheme worth Rs 6,000 crore primarily for tractors. “One Time Settlement (OTS) announced for #Agriculture #Loans! Scheme valid until 31st March. Contact your branch for details & benefits,” the nation’s largest lender said on the microblogging site Twitter today.
Managing director Rajnish Kumar told CNBC-TV18 the scheme will result in the bank taking a 40 per cent haircut on outstanding tractor loans as of September 2016.
SBI’s total farm loan portfolio is Rs 1.25 trillion and Kumar said the tractor loan book is about Rs 6,000 crore.
He said doubtful or loss category accounts as of September 2016, which were disbursed before September 2011, will be considered under the scheme. He said a circular in this regard was sent to branches on February 2.
But he was quick to add the OTS has nothing to do with Prime Minister Narendra Modi’s promise of a loan waiver to UP farmers during the just concluded elections, saying there were no talks with the Centre or state in this regard so far. SBI’s Uttar Pradesh portfolio will be around Rs 13,000 crore.
SBI had announced OTS schemes for SMEs last December and education loans early in 2016. He said other agri loans like kisan credit cards and other term-loans for tractors and farm loans may also be covered under the scheme.