Kerala - Kochi   

Withdraw RBI circular on farm loan waiver: MP

KOCHI: Kerala Congress (Joseph) leader P.C. Thomas, MP, on Saturday demanded withdrawal of a circular issued by the Reserve Bank of India (RBI) exempting long-term agricultural loans taken before March 1997 from the agriculture debt waiver and relief scheme.

At a press conference here on Saturday, he said the circular issued on March 28 also exempted the short-term loans above Rs.1 lakh from the waiver scheme. He said it ran contrary to what had been declared in Parliament by Union Finance Minister P. Chidambaram and also in the budget.

The circular sent to various chiefs of the banks pointed out that only those direct agricultural loans which fulfilled all the three conditions would be eligible for debt waiver/debt relief under the scheme. The conditions were that the loan should have been disbursed between March 31, 1997, and March 31, 2007, that it should be overdue on December 31, 2007, and have remained unpaid until February 29, 2008.

A short-term production loan disbursed up to March 31, 2007 for raising crops with repayment period of 18 months would not be eligible for debt waiver/debt relief if it had not become overdue on December 31, 2007, the circular said.

The short-term production credit included working capital loan up to Rs.1 lakh for traditional and non-traditional plantations and horticulture. Mr. Thomas said the traditional plantation includes cardamom, tea and non- traditional include rubber etc. The stipulations by the RBI would hit the farmers in the state. He alleged that these were part of a ploy adopted by the Union Finance Ministry and the RBI to somehow avoid full implementation of the announcement made in the budget because of its huge commitments. The action of the RBI and the Finance Ministry was tantamount to cheating the people, he said.

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