Now, govt at RBI door with plea to recast debt

Ruchika M Khanna

Tribune News Service

Chandigarh, July 26

The Punjab Government has now sought the help of the Reserve Bank of India for its debt waiver scheme. It has asked the RBI to restructure crop loans worth Rs 6,000 crore taken by small and marginal farmers in Punjab.

A high-powered delegation, led by Chief Principal Secretary Suresh Kumar, Finance Minister Manpreet Singh Badal and Chief Secretary Karan Avtar Singh, is learnt to have met officials of the RBI, seeking their help in implementing the loan waiver.

They are learnt to be pressing the regulatory bank for asking the nationalised and commercial banks to not just let go of a part of the interest on crop loans, but also give them directions to offer a one-time settlement scheme for settling the farmers’ loans.

Sources say the delegation, in the meeting held late this evening, is understood to have presented the states’ proposed debt waiver policy. After a meeting with the State Level Bankers Committee (SLBC) here yesterday, the bankers had expressed some apprehensions regarding rolling out an OTS scheme or restructuring the advances given to small and marginal farmers. The bankers are learnt to have told the state government functionaries that both these issues could be implemented only if it is approved by the RBI.

Of the Rs 9,500 crore waiver that is proposed to be given to 10.40 lakh farmers, these commercial banks have advanced Rs 6,000 crore. For the debt relief scheme to be implemented, the government needs to first repay this loan to the banks, and only then the banks will start advancing fresh crop loans to farmers.

It is learnt that the issue of ensuring that the loan accounts of intended beneficiary farmers, who have not repaid the loan to the banks in hope of getting waiver, are not categorised as bad/NPA accounts, was also discussed. The government is learnt to have pleaded that if these accounts were declared as NPA, they would lose the interest subvention on crop loan (of 4 per cent) and could turn to non-institutional sources of getting credit (arhtiyas).

It may be noted that the same issue of getting Centre’s help – by converting this Rs 6,000 crore crop loan into term loan that Punjab will be repaying to banks on behalf of farmers -- was also discussed in a a meeting of Chief Minister Capt Amarinder Singh with Prime Minister Narendra Modi and Union Finance Minister Arun Jaitley a few days ago. Sources say the meeting with RBI officials was held as a follow-up to that meeting.

Meanwhile, the government delegation is also meeting top officials in NABARD to seek it help in getting refinance for the state’s cooperative banks. With the deadline for repaying the loan approaching on July 31, the date government is seeking additional time to repay this loan of Rs 3,600 crore.