Loan waiver scheme includes interest component : FM

Loan waiver scheme includes interest component : FM Finance Minister clarifies that loan waiver scheme includes interest component and asks all PSU banks to prepare the list of beneficiaries by 25th of this month. Finance Minister P Chidambaram has directed all PSU banks to prepare the list of beneficiaries under the ambitious 71,860 crores debt relief package by 25th of this month. The Finance Minister has clarified that interest rate component will also be eligible under the scheme so that every farmer will be eligible for fresh loans. "On June 25, we hope to get the list (of farmers)," the Finance Minister told various PSU banks heads through a video-conferencing. He asked these banks to get themselves satisfied by 23rd June that inspection and superchecks in this regard have been done and list of farmers prepared. On 24th June, Financial Services Secretary Arun Ramanathan will get in touch with PSU banks Chairmen to take the confirmation that the list is prepared, he said. The Finance Minister also clarified that interest not serviced as on 31st December 2007 will also be included for the purpose of debt waiver in the case of investment loans. In case of loans to farmers through self-help groups, Chidambaram said disaggregated data could be maintained in books of these groups, provided banks are satisfied with that data. Under the loan waiver scheme, loans provided directly to group of individual farmers like Self Help Groups will also be included, but disaggregated data of the loan extended to each farmer must be maintained. In his budget speech, the Finance Minister has set 30th June as the deadline for waiving debt of farmers with holdings up to three hectares. The size of the loan waiver was subsequently enhanced to Rs 71,680 crore, and its coverage widened to include seven million more marginal and small farmers, taking the number of such beneficiaries to 43 million from the originally proposed 40 million.

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