The Hindu Business Line : Centre unveils relief package for coffee

THE Union Government and the Reserve Bank of India (RBI) have unveiled a new relief package for the coffee sector after detailed discussions and consultations with the trade.

As part of the new package, all types of coffee loans (short, medium and long-term including re-phased/rescheduled loans) which are outstanding as on June 30 and not classified as non-performing assets (NPAs) would be consolidated into a single term loan viz, special coffee term loans (SCTL), an official release said here on Monday.

The repayment schedule of the SCTL would range between 7 and 9 years including an initial repayment holiday (moratorium) of two years subject to review thereafter. The growers who have availed crop loans in 2001-02 should pay back a minimum 75 per cent of crop loans to be eligible for availing fresh crop loans in 2002-03 and the balance 25 per cent would be included for reschedule in the special coffee term loans package.

The banks have also agreed to consider charging one per cent less than the applicable rate of interest during the moratorium period for the special coffee term loans subject to interest not less than the prime lending

rate. Further, the State Level Bankers' Committee (SLBC) and Nabard have agreed that, after rescheduling all the extant loans, fresh crop loans would be considered as per revised scale of finance to be fixed, taking into account the cost of cultivation more realistically.

In the light of this package, the Commerce Ministry has advised the Coffee Board to immediately constitute field teams which should go to different coffee- growing areas, interact with the traditionally well-disciplined growers and educate them to adhere to the discipline of the system under which they borrow from the banks and derive maximum advantage out of the current relief package announced by RBI.

Besides , the Centre has also implemented a scheme providing for interest relief at 5 per cent to the small coffee growers on loans availed by them from financial institutions.

The nodal minister had taken up with the commercial banks for rescheduling the loans of coffee growers and extend fresh crop loans to this sector, it added.

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