The Hindu : Tamil Nadu / Chennai News : Aid to repay non-farm loans

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Wednesday, Jul 08, 2009
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Tamil Nadu

Tamil Nadu - Chennai

Aid to repay non-farm loans

Special Correspondent

Interest rate cut from 12 per cent to 6 per cent
Penal interest and other expenses waived

CHENNAI: The Tamil Nadu government on Tuesday unveiled an interest subvention scheme to ensure the repayment of outstanding non-farm loans released by cooperative banks.

The loanees will pay 6 per cent interest instead of 12 per cent. The State would meet 4 per cent of the interest burden and the rest would be borne by the individual banks. Penal interest and other expenses are waived. Making a suo motu statement in the Assembly, Finance Minister K. Anbazhagan said the scheme would apply to loans originally scheduled to be repaid by March 31, 2007. The outstandings in question amount to Rs.709.51 crore. The scheme will benefit 1.32 lakh people.

Under the scheme, those who obtained loans should enter into an agreement with the bank before October 31, 2009 and repay the entire amount in three months.

A quarter of the amount should be paid on the day of signing the agreement and the rest in three instalments, or in a single instalment within three months.

The subvention would cost the government Rs 144.22 crore and the waiver of penal interest and other expenses Rs 101.98 crore and Rs 4.61 crore respectively.

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