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YSR unveils proposals to bail out ryots

By Our Special Correspondent

NEW DELHI, MAY 30. Concerned over hardships being faced by farmers, the Chief Minister, Y.S. Rajasekhara Reddy, today said the State Government was considering putting a moratorium for a year on repayment of loans taken by farmers from private moneylenders.

Talking to reporters here, Dr. Reddy said there was also a proposal to put a cap on the rate of interest being charged by private moneylenders from farmers. He said the Government was aware that moneylenders were charging exorbitant interest rates from farmers and added that the rate should be reasonably fixed at 12 per cent. He said a Cabinet sub-committee could look into the problems as the Government did not want to choke the credit flow to farmers.

The Chief Minister said he had written to the Reserve Bank of India drawing its attention to the fact that commercial banks were not extending loans in proportion to their deposit base. At present it was not even 9 per cent of their deposit ratio, he said.

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