Hyderabad: The RBI has agreed to reschedule loans taken for the Kharif 2013-14 season by farmers of both the states.
However, the RBI’s offer falls short of the AP government’s demand for a seven-year re-schedulement period for all loans including gold and DWCRA (SHG) loans, along with land mortgaged pass book loans.
The AP government is now writing to the RBI specifically asking for extending the relief to seven years, and making it applicable to gold loans as well.
Andhra Pradesh finance minister Yanamala Ramakrishnudu on Wednesday convened an emergency meeting with chief secretary I.Y.R. Krishna Rao and senior officials of the finance department.
“We will seek details from all banks at the village level and submit the information sought by RBI. A detailed report will be sent to the RBI when Mr Naidu returns to the city from West Godavari on Thursday,” sources said.
The response of the Telangana government was not immediately known as the meeting of the state Cabinet, which intends to discuss the farm loan waiver among other things, was still going on late in the evening.
In a subtle change of approach towards the farm loan issue, the Andhra Pradesh government has been giving more stress on loan re-schedulement owing to a much larger financial liability arising out of its loan waiver promise, while the Telangana government has been talking about a loan waiver as it considers too much dependence on loan recast would mean more financial burden either on farmers or on the government.
Short-term agriculture loans amounting to over Rs 11,700 crore are expected to be covered under the re-schedulement programme in Andhra Pradesh if the loans taken in the last Kharif season alone are considered for re-schedulement.
But the banks will have to reverse the interest charged on these loans.
The fate of the balance loan dues will be known only after the governments came out with a clear eligibility criteria for their loan waiver promise, according to bankers.
In Andhra Pradesh, the reschedule of farm loans is likely to cover farmers of only 575 drought and cyclone-hit mandals, and not all the 661 mandals in Seemandhra.
The Andhra Pradesh government has already asked the RBI to consider re-schedulement of loans taken for the Rabi crop too.
