The Andhra Pradesh Chief Minister N Chandrababu Naidu today said he will take up the issue of farm loan waiver with Prime Minister Narendra Modi and RBI and see that it is implemented at the earliest.
On a hectic day, an expert panel appointed by the government on loan waiver headed by former chief of Nabard, P Kotaiah, met the RBI Governor Raghuram Rajan in Mumbai to convince him on the need for loan waiver.
It may be noted that RBI earlier has expressed its displeasure over the waiver proposal as it would destroy repayment culture.
RBI is understood to have remained non-committal but assured that the proposal would be examined.
The loan waiver is an important decision the new government has taken as it was felt that the farm sector needs government support at this critical juncture.
As the kharif season has already started, farmers are waiting for loans and banks, on their part, are also issuing demand notices to farmers, especially those with gold loans, as they stand the risk of becoming non-performing assets after 90 days of non-payment.
Bankers’ standWhen contacted, a senior SBI official said that recovery of any loan is subject to asset quality norms of RBI and unless clear directions are given for rescheduling, recovery process cannot be halted. “The first quarter has almost ended. All this will add to higher non-performing assets,’’ he said.
The panel on Sunday suggested to the Chief Minister options such as rescheduling/waiver of crop loans up to ₹ 1 lakh to ₹1.50 lakh and gold loans. This would cause an approximate burden of ₹25,000 crore and ₹5,000 crore respectively. The total outstanding loan portfolio in Andhra Pradesh is around ₹1.07 lakh crore, as per state level bankers’ committee data.