Agri loan moratorium extended till December 31

INDIA-ECONOMY-AGRICULTURE

Thiruvananthapuram: The moratorium on rescheduled agricultural loans has been extended until December 31. The decision came in a meeting of bank representatives called by Kerala Chief Minister Pinarayi Vijayan on Wednesday.

A total of 1.31 lakh customers have rescheduled small and medium loans for home, agriculture and education. However, the new deadline will apply only to 34,682 customers out of 5.43 lakh who have rescheduled agriculture loans.

5.08 lakh customers who have not rescheduled loans can apply for a higher amount if the arrears are settled. In such a scenario, a new loan comprising of the pending amount and the new amount will be sanctioned.

However, the deadline extension will not apply on agriculture loans taken on gold.

The extension was made possible after the Reserve Bank of India let State Level Bankers’ Committee (SLBC) take a call on the moratorium. The government can introduce schemes that could help customers pay installments in time, SLBC has suggested.

What is a moratorium?

A moratorium is a legal authorization to debtors to postpone payment. A one-year moratorium implies that customers need not pay back loan amount or interest during the year. They have to reume payments after the time period mentioned in the moratorium ceases to operate.

However, the interest unpaid during the moratorium period gets added to the loan amount, increasing Equated Monthly Installment (EMI) due. The government had intervened for a moratorium after the floods last year.

How to reschedule a loan?

• Farmers who have not rescheduled loans need to approach banks and seek extension of the moratorium.

• Those who have not rescheduled their loans must pay the outstanding interest and convert the loan into a new one. If not, the outstanding interest and fine will increase with time.

• The extension does not apply to other loans or agriculture loans taken over gold. Such customers should approach the bank to discuss further procedures.

• Those facing eviction procedures can approach district-level committees formed by SLBC for respite.

SLBC had formed district-level panels to help customers who are likely to face eviction procedures. The panels were formed after they were found to be effective in Wayanad and Idukki districts where farmer suicides have been reported. The panel will have an SLBC representative, district lead bank manager, a bank representative and an agricultural officer. Banks have to seek the panel’s permission before initiating eviction procedure.

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