The Hindu Business Line : Farm loan waiver bill for banks may be lower

Mumbai/Delhi, June 30 As the deadline for the farm loan waiver scheme announced in the Budget came to a close, banks were pulling all stops to finalise their numbers.

At first glance, it appears that the waiver bill for commercial banks may be substantially lower than the estimates provided earlier. The final numbers have not yet been released by many banks pending an audit of these figures.

PSB waiver

But estimates available from eight major public sector banks (that account for over 50 per cent of the banking business in the country) show that their waiver bill would be about Rs 12,000 crore. The waiver of loans by these eight banks would benefit close to 47 lakh farmers.

The total loan waiver package was initially estimated to be about Rs 60,000 crore. This was revised by the government to Rs 71,680 crore recently.

A substantial chunk of the waiver would be for loans given by co-operative banks. Going by the estimates available, the bill for the commercial banks in the country may come to between Rs 25,000 crore and Rs 30,000 crore.

Lower than projection

In a couple of cases, the amounts that are going to be waived off are lower by more than 35 per cent when compared to the initial projections. Some of this is due to clarifications issued by the Government and the RBI on the loans that were eligible for waiver.

For instance, Union Bank of India has come up with an estimate of Rs 961 crore against its earlier estimate of Rs 1,345 crore. Bank of Baroda is now projecting a waiver amount of Rs 665 crore as against Rs 1,000 crore projected initially while Bank of India is projecting Rs 869 crore against Rs 1,400 crore initially.

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More Stories on : Farm credit | Budget | Public Sector Banks

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