FM says Loan waiver scheme includes interest component

Finance Minister P Chidambaram has directed all PSU banks to prepare a
list of beneficiaries under the ambitious 71,860 crore debt relief
package by 25th of this month.


"On 25th June, 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.

The Finance Minister further clarified that the interest rate
component will also be eligible under the scheme so that every farmer
will be eligible for fresh loans.