The Hindu Business Line : CARD banks offer settlement — Interest cuts, other sops promised

12 pc uniform interest
Loans contracted at unusually high rate of interests and since defaulted will attract a uniform 12 per cent at the time of settlement. Loans of Rs 5,000 and below will be settled without payment of any interest component.

Thiruvananthapuram , Feb. 24

Agricultural development banks in the State will offer a one-time settlement for defaulted loans in a package featuring interest concessions and assorted benefits.

Announcing this, Mr K. Sivadasan Nair, President of the apex Kerala State Co-operative Agricultural and Rural Development Bank (KSCARDB), said here that the offer is applicable to all outstanding loans as on December 31, 2005.

Being implemented as part of the golden jubilee celebrations of the KSCARDB, the scheme will be applicable across the State through the months of March and April.

There will be no penal interest payable nor will other incidental expenses be involved.

Loans contracted at unusually high rate of interests and since defaulted will attract a uniform 12 per cent at the time of settlement. Those sanctioned at below 12 per cent will be settled at the `simple interest rate' mentioned separately in the loan document.

A rebate of five per cent will also be granted for purposes of the conduct of the scheme.

Loans of Rs 5,000 and below will be settled without payment of any interest component. For loan amounts of Rs 25,000 and below, interest waiver will be allowed for arrears amounting to no more than Rs 5,000 in case the borrower is suffering from a serious affliction or has incurred total disability as a result.

Other cases that can be settled under the scheme include accounts (i) not operated for a considerable duration and defaulted repeatedly (ii) are already facing recovery proceedings, or (iii) where assets have been auctioned but await orders from the Cooperative Department to proceed further. Specific instances where borrowers have died or have suffered total disability from an accident or by a disease are eligible for specific concessions for one-time settlement as decided by a special committee of the bank.

Mr Sivadasan Nair requested that all defaulting borrowers benefit from the concessions offered to settle their outstanding loan accounts.

Whole-hearted cooperation from borrowers will go a long way in reducing the bank's burden of non-performing assets, he said.

The precious funds made available could, in turn, be diverted for implementing a series of other schemes intended for the welfare of farmers, he added.