The Hindu Business Line : Loan waiver is win-win for all: S.K. Goel

Kolkata, Feb. 29 The CMDs of three Kolkata-based public sector banks welcomed the waiver of farm loans, as announced by the Union Finance Minister in his budget speech on Friday.

“It is a win-win for all i.e. for the government, for the banks and of course the farmers,” said Mr S.K. Goel, CMD of UCO Bank, pointing out that the waiver would not cost the bank anything as the government would most probably issue the long-term SLR bonds equivalent to the waiver amount to the banks. In other words, the government would not be required to cough up cash immediately. The waiver amount for UCO Bank, Mr Goel estimated, would be about Rs 500 crore.

According to Mr A.C. Mahajan, CMD of Allahabad Bank, the waiver would help banks in two ways. First, it would help clean up their balance sheet and second, the farmers, who were so far not eligible for fresh loans because of outstanding, would now become eligible for fresh loans and to that extent the bank’s advances would rise.

Mr Mahajan estimated the bank’s waiver amount at Rs 300 crore. “We’ve already made some provisioning in respect of earlier overdues,” he said.

Mr P.K. Gupta, CMD of United Bank of India, estimated the waiver amount for the bank at Rs 150 crore. “Our total advances to the agriculture sector will be about Rs 2700 crore of which the loans to small and marginal farmers will be about Rs 150 crore but we’re still working out the figure as there are so many parameters”, Mr Gupta observed.

More Stories on : Budget | Farm credit

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page