Andhra Pradesh Pradesh Chief Minister N Chandrababu Naidu has on Monday asked banks to reschedule crop loans and disburse fresh kharif loans.
"If you can reschedule loans, it will give us some flexibility as the expert panel is now working on debt waiver modalities and will submit its report in within a month," Naidu said while addressing the first State Level Bankers Committee (SLBC) after the bifurcation here.
"We don't have money today but have resources and vision,’’ he said adding that the existing schemes for farmers with either zero per cent interest and 3 per cent would be continued.
C V R Rajendran, President of SLBC and CMD of Andhra Bank said crop loan disbursal by banks had almost come to a halt in the present Kharif season during which 60-70 per cent loan disbursal generally happen. The farmers were reluctant to repay/renew crop loans and other agricultural loans anticipating debt waiver, he said.
Banks were unable to recycle the funds owing to none repayment and mounting over dues were badly affected the morale of field staff. "The slippage of agri loans into non performing assets are on a very high side affecting the credit rating of banks," Rajendran said.
The total priority sector advances in the State stood at ₹1,37,250 crore as on March 2014 out of which agricultural advances were ₹87,612 crore, as per SLBC data. The government should bring clarity on the proposed debt waiver on a priority basis with due publicity, he added.
Later, the Chief Minister formally launched the State credit plan for the year 2014-15. The total outlay of the plan was pegged at ₹91,459 cr out of which ₹56,019 crore was earmarked for agriculture.
Meanwhile, public interest litigation has been filed in the AP High Court seeking intervention of the court as the debt waiver proposal has put the state finances in danger. The court is expected to hear the case some time next week.