Financial Daily from THE HINDU group of publications
Friday, Mar 10, 2006
Financial Daily from THE HINDU group of publications Friday, Mar 10, 2006 |
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Money & Banking - Farm credit Agri-Biz & Commodities - Budget RBI wants immediate action on interest relief to farmers Our Bureau
All crop loans for kharif and rabi disbursed to the farmers during the financial year 2005-06 will be eligible for the relief.
Mumbai , March 9 The Reserve Bank of India has asked the banks to credit the farmers' accounts with interest relief of two percentage points before March 31. The relief, contained in the Union Budget speech, is applicable on the principal amount of up to Rs 1 lakh of crop loans availed of by the farmers for kharif and rabi 2006. The banks can seek reimbursement from the RBI after crediting the relief to the farmers' account, according to a circular issued to the banks on Thursday. All crop loans for kharif and rabi disbursed to the farmers during the financial year 2005-06 will be eligible for the relief. However, where each crop loan exceeds Rs 1 lakh, the interest relief will be applicable to the principal amount of Rs 1 lakh. The interest relief may be calculated at two percentage points on the amount disbursed from the date of disbursement/withdrawal up to the date of payment, or up to the date beyond which the outstanding loan becomes overdue. This will be March 31, 2006, for kharif and June 30, 2006, for rabi. The banks will be reimbursed by way of credit to their accounts with the RBI within one month of the date of receipt of claims from them. The National Bank for Agriculture and Rural Development (Nabard) will issue suitable instructions in this regard to co-operative banks and regional rural banks, a statement from the RBI said.
More Stories on : RBI & Other Central Banks | Farm credit | Budget
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