Rescheduling of loans in AP soon

Crop loans in drought-hit mandals of Andhra Pradesh will be rescheduled shortly.

The Reserve Bank of India (RBI) is expected to give its nod for rescheduling of crop loans in most of the mandals in the state on grounds of drought, according to a senior official.

As per the present thinking, rescheduling of crop loans might be permitted in approximately 500 mandals out of the 671. Once implemented, this would give relief to farmers who are not being extended new loans by banks in the on-going kharif season, due to the stalemate over the promised loan-waiver by the State Government.

Loan rescheduling on the grounds of natural calamities is not new for the State. According to the State Level Bankers’ Committee (SLBC) data, between 2009 and 2012, the total rescheduled crop loans in the state stood at ₹8,000 crore.

This is a blessing in disguise for Chief Minister N Chandrababu Naidu, who is under pressure to ensure timely sanction of crop loans to the farmers irrespective of loan-waiver modalities. But problems still remain for the Govt as it would still need to work on providing loans to farmers in the non-drought-hit mandals where rescheduling of loans is not going to be taking place.

The apex bank is expected to announce the final modalities of rescheduling of crop loans such as their limit and duration in about a week.

The total agricultural advances at the end of last year were ₹87,617 crore, one of the highest amounts in the agricultural credit of the country.

It is not yet clear whether rescheduling of loans would be applicable to the members of Self Help Groups (SHGs) who are also awaiting waiver in line with the Chief Minister’s promise. The total outstanding loans of rural and urban SHGs stood at ₹22,773 crore as on March 31, 2014.

The RBI may adopt a similar approach in Telangana too where Govt had promised waiver of ₹17,000 crore crop loans.