Indian Bank said on Tuesday that it has started rescheduling and restructuring of loans to the farm sector in drought—hit areas.

”...We are rescheduling and restructuring loans wherever district administration is saying (to banks)...In Indian Bank we have already started (wherever district administration is saying),” bank’s Chairman and Managing Director, T M Bhasin, told reporters here today.

Bhasin said the bank is not treating agriculture loans in drought—hit areas as Non Performing Assets (NPA) according to the guidelines of RBI and its repayment gets shifted to next cropping cycle.

“We are even funding for second crop cycles (to farmers) and then consolidated liability of farmers will be taken into account for recovering dues (from farmers) in next crop season,” he said.

Indian Bank’s exposure to farm loan is 18.5 per cent while outlay to direct agriculture is 16.87 per cent.

“Out of bank’s Gross NPA’s of 1.66 per cent as on June 30, 21 per cent is NPA to agriculture. If we compare with 18.5 per cent (farm loan), you will slightly find it is more than the other sectors,” he said asserting that it is not a major cause of concern.

Union Agriculture Minister, Sharad Pawar, during his visit to Punjab and Haryana last week had said he had asked NABARD to prepare a rescheduling programme on crop loan for those farmers who faced additional financial burden due to deficient rain.

Pawar had also said the drought would affect farm production in Karnataka, some parts of Maharashtra, Rajasthan and Gujarat states.

Indian Bank’s total business as of now is Rs 2.25 lakh crore of which Rs 95,000 crore are advances.

Bank’s gross NPA stood at 1.66 per cent valuing Rs 1,580 crore as on June 30 and it has been able to bring Rs 5,500 crore of loan book under Corporate Debt Restructuring to “normal health”, he said.

“Out of restructured loans, Rs 360 crore of loans are NPA and Rs 152 crore has been recovered in cash in quarter one,” he said.

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