The Hindu Business Line : CM asks banks to speed up conversion of crop loans

Hyderabad, Oct 29 The Andhra Pradesh Chief Minister, Mr K. Rosaiah, has asked banks to speed up conversion of crop loans into term loans in drought and flood-hit districts in the State.

Addressing the 168th meeting of the State-Level Bankers’ Committee (special focus on drought & flood relief measures) here on Thursday, the Chief Minister said: “The feedback received so far indicate that the conversion of crop loans in the drought affected villages is very tardy and farmers are still looking for the relief from banks.”

Fresh loans should be given after the conversion of existing loans, he added.

The converted loans should be treated as current dues with no levy of compound interest, he directed.

Mr Rosaiah also requested the banks to provide consumption loans to the farmers, fresh loans to Self-Help Groups and financial assistance (up to a maximum of Rs 50,000) to petty traders and small business establishments in the flood-affected areas.

On Indiramma housing scheme, the Chief Minister asked the banks to come forward to extend bridge loans of Rs 20,000 for the on-going third phase.

“I understood that banks are not coming forward to take up the urban poor housing loans even though it is an approved programme under the State credit plan,” he said.

Mr R.S. Reddy, President of SLBC and Chairman and Managing Director of Andhra Bank, said the total damage due to floods was estimated at Rs 12,825 crore.

All the banks and lead district managers were advised to initiate the relief measures in line with the Reserve Bank of India’s Master Circular on Natural Calamities.

“The Gazette Notification on the flood affected villages/mandals is yet to be released by the State Government. It will serve as a precursor for extending relief measures by banks,” Mr Reddy said.

The Govt should release the notification at the earliest, he requested.

Dr N Krishna Mohan, Regional Director, RBI, said the relief measures by banks should also include waiver of pre-closure fee on fixed deposits, relaxation Know Your Customer Norms, waiver of fees on electronic fund transfer on inward cash flows.

“The business continuity plan is vital for banks. Identify alternative locations if branches are badly damaged due to floods. Setting up of extension counters, mobile banking facilities should also be taken up,” he said.

The apex bank had already sent fresh note remittance to banks in the flood-hit areas to address any shortage in currency, he added.

Mr N. Raghuveeera Reddy, Minister for Agriculture, asked the insurance companies to be proactive in settling the claims of farmers.

The insurance companies should not deny claims on the grounds of crop-cutting norms; he said adding there could be no crop-cutting as entire crop was washed away in floods.

Banks should also come forward to lend in the ensuing rabi season. “If you don’t do it, the food security in the State will come under threat,” he added.

More Stories on : Farm credit | Andhra Pradesh

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