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G. Srinivasan

NEW DELHI, Feb. 6

THE Reserve Bank of India (RBI) announced further relief measures to small tea growers and bought tea factories on Thursday by accepting to implement most of the important suggestions made by the Working Group chaired by Mr Madhukar of the United Bank of India.

Official sources told Business Line here said while the Tea Board sought 25 per cent capital subsidy in respect of those capital expenditures incurred during last three years in creating assets for enhancing the production capacity of the borrowers, where such borrowers could not arrange for the full tie-up of such capital cost provided the borrower is having sound track record. The working group said the Tea Board has subsidy scheme for replantation and implementation of this scheme is to be expedited.

The sources said RBI in a direction to the commercial banks and Nabard stated that the basic principle of a rehabilitation of a unit is that all the stakeholders must honour their commitments. While the banks have gone ahead with the restructuring of loans, the Tea Board has not yet provided capital subsidy to any of the units. Hence the apex bank has suggested that the changes in the package as requested by the Tea Board and the working group might be permitted, subject to the proviso that the capital subsidy is provided by Tea Board.

RBI has stated that non-honouring of commitment by others might make the units non-viable and any fresh advances provided to them might also turn non-performing assets.

On the repayment period of term-loans by small tea growers, RBI has said as the amounts entailed in the loans availed of by the small tea growers would unlikely to be large, the repayment period might be restricted to only 7 years as is applicable to rehabilitation of sick units. Moratorium period might be restricted to one year only as tea plucking is a continuous process. On the Madhukar committee report suggestion of interest as applicable to agriculture term loan from time to time is to be charged, the RBI has said this issue is left to banks to decide based on their commercial judgement and loan policy in this regard. The apex bank has accepted the committee's view that during the moratorium period the tea growers should pay the interest portion.

On small growers who want to take up pruning might be given a term loan of Rs 7000 per acre with applicable rate of interest repayable within 3-4 years, provided such expenditure of pruning is not included in the cash budget, RBI has not accepted this since banks are not expected to share any portion of interest subsidy. The apex bank said the concessions in the rate of interest in respect of large tea growers might be allowed to bought leaf factories too.

The apex bank has asked the tea associations to help in recovery of loans, especially from wilful defaulters, besides associating themselves with the recovery campaigns launched by the banks. 1925.

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