Loans of rain-hit borrowers will be restructured: Sukhu

Shimla, September 1

Chief Minister Sukhvinder Singh Sukhu today said that the state government would extend interest subvention facility to borrowers, who had been affected by the natural calamity.

He said, “The State-Level Bankers Committee in consultation with the RBI will provide interest subvention facility to borrowers to provide the much-needed relief to them.” The state government has decided to restructure loans keeping in view the hardships faced by borrowers in areas that were ravaged by unprecedented heavy rain, which also triggered flashfloods and landslides, he added.

Deferred principal repayment

• The initiative focuses on rescheduling all types of existing loans, including those taken by micro, small and medium enterprises, retail and others but excluding advances related to agriculture and allied activities
• Eligible debtors will be provided a moratorium period, allowing deferment of the payment of the installments of principal for up to 12 months from the date of the implementation of the restructuring measures

Sukhu said that subsequent to the declaration of the state as a natural disaster affected area on August 18, consultations with banks culminated in the finalisation of these essential measures. “This initiative focuses on rescheduling of all types of existing loans, including those taken by micro, small and medium enterprises (MSMEs), retail and others but excluding advances related to agriculture and allied activities,” he added.

He said that it was in accordance with the RBI circular that relief measures for loans extended for agriculture and allied activities would be provided after the state government makes an assessment of crop loss.

Sukhu said that to determine the eligibility for relief, the loan accounts, which were not overdue as on June 24, would qualify for restructuring. The entire restructuring process would be completed in three months from August 18 when the state government had declared the rain fury as a natural calamity.

He said that eligible debtors would be provided a moratorium period, allowing the deferment of the payment of the installments of principal for up to 12 months from the date of the implementation of the need-based restructuring measures, assessed on a case-to-case basis. This significant relief efforts extend to all regulated entities of the RBI, including scheduled commercial banks, regional rural banks, cooperative banks (both rural and urban) and small finance banks.