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Mr Prakash P Mallya

Our Bureau

Bangalore, June 9 The public sector Vijaya Bank has estimated the impact of the farm loan waiver scheme at Rs 313.69 crore.

The bank has started its due diligence exercise on the waiver, which included identifying eligible farmers. The scheme involved both write offs and rescheduling of overdue loans. The scheme involved farm loans disbursed between March end 1997 and March end 2007. Only those loans that remained overdue till December 2007 would be eligible for the waiver scheme.

The gross agricultural over dues eligible for the waiver scheme have been identified as Rs 516.36 crore. The bank Chairman and Managing Director, Mr Prakash Mallya, said the bank had already identified about 93,000 farmers for the scheme, in all categories. The total over dues from small and marginal farmers amounted to Rs 246.13 crore. Small and marginal farmers are those with land holdings less than 2.5 hectares.

For larger farmers, the scheme involved offering a one-time repayment scheme. Under the scheme, 25 per cent of the overdue portion was to be waived and the remaining over due portion was to be settled in three settlements by June end 2009. Overdues from this category of farmers, Mr Mallya said, were about Rs 270.23 crore. The waiver, he said would be about Rs 67.56 crore.

Mr Mallya, who is directly supervising the farm waiver scheme, said “the impact will be far lower than initial estimates once the due diligence is completed.” The lower impact estimates were on account of the high recoveries of farm loan. Farm advances for Vijaya Bank was upwards of 90 per cent, he said. The waiver would allow the farmers to become eligible for fresh crop loans.

He said that the bank would complete the entire exercise of preparing the farmers eligible for the waiver before June 23 this year or ahead of the deadline of June 30 fixed by the Union Finance Ministry.

More Stories on : Farm credit | Public Sector Banks

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Vijaya Bank begins due diligence on waiver scheme

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