RBI agrees to rescheduling of farm loans in AP

• This enables State govt / farmers to repay loans in small installments
  
• With this, farmers will be eligible to get fresh loans
  
• T govt also expects the same facility from the apex bank

Hyderabad: The Andhra Pradesh government got a major boost following the decision of the Reserve Bank of India to give its nod for re-scheduling of farm loans. Announcing this here on Tuesday, Finance minister Y Ramakrishnudu said RBI Governor Raghuram Rajan had agreed to the proposal to reschedule farm loans following a telephonic discussion Naidu had with the RBI Governor on Tuesday which was followed up by Chief Secretary IVR Krishna Rao who had a phone line meeting with the RBI Deputy Secretary. It may be mentioned here that the banks had so far refused to reschedule the loans saying that they were not authorised to do so unless the RBI directs them. The Finance Minister said clarity on the cut off date for rescheduling the loans and the maximum amount of loans that would be eligible for rescheduling would be known only after the government received a formal letter from the RBI. According to sources, the loans of the farmers are likely to be rescheduled for a period of 3 or5 years. The government or the farmers will have to repay these loans in small amounts every year. However, a higher interest rate will be collected after rescheduling. In this case, as the state government had promised loan waiver, the rescheduled amount will be paid by the government. The banks now will give fresh loans to the farmers in the Kharif season even without repaying the loans. Meanwhile, the Telangana government on Tuesday evening expressed hope that the apex bank would consider their request also for rescheduling of farm loans. The T government hopes that the RBI would make this announcement at its general meeting scheduled to be held in Chennai on Wednesday.