Lok Sabha Question No. 4920 (UNSTARRED), answered on 2019-07-23
Subject: Moratorium on Repayment of Farmers’ Loan
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: Rahul Gandhi

## GOVERNMENT OF INDIA MINISTRY OF AGRICULTURE AND FARMERS WELFARE DEPARTMENT OF AGRICULTURE, COOPERATION AND FARMERS WELFARE

## LOK  SABHA UNSTARRED QUESTION NO.4920

TO BE ANSWERED ON THE 23 RD  JULY, 2019

## MORATORIUM ON REPAYMENT OF FARMERS' LOAN

4920.  SHRI RAHUL GANDHI:

Will the Minister of AGRICULTURE AND FARMERS WELFARE कृ ष एवं कसान कयाण मंी be pleased to state:

- (a) whether the Government has taken into account the concerns of farmers in States like Kerala as the banks have warned that they will initiate proceedings to attach property over loans and the Reserve Bank of India has refused to issue an order extending the moratorium period;
- (b) if so, the details thereof and the measures taken by the Government in this regard;
- (c) whether the Government is ready to instruct the Reserve Bank of India to give permission to banks to extend the moratorium on repayment of farmers' loan, if not, the reasons therefor; and
- (d) whether  the  Government  is  ready  to  give  instructions  to  banks  not  to  take  punitive measures including  the  attachment  of  property  of  poor  farmers  during  this  period,  if  not,  the reasons therefor?

## ANSWER

## MINISTER  OF AGRICULTURE AND FARMERS WELFARE

कृ ष एवं कसान कयाण मंी (SHRI NARENDRA SINGH TOMAR)

- (a)  to (d): The matter relating to restructuring of loans and the period of moratorium etc are regulated by the guidelines issued by the Reserve Bank of India (RBI) from time to time. RBI has put in place a mechanism to address situations arising out of natural calamities and has issued  directions  to  Banks  in  their  Master  Directions  on  'relief  measures  by  banks  in  areas affected  by  Natural  Calamities'  dated  October  17,  2019  for  undertaking  necessary  relief measures.  Sufficient  discretion  has  been  provided  to  banks  for  take  appropriate  action depending upon the nature/severity of the calamity.  Directions, inter-alia, contain instructions to bank  to  ensure  that  the  meetings  of  District  Consultative  Committee  or  State  Level  Bankers Committee (SLBC) are convened at the earliest after declaration of natural calamity to evolve a coordinated  action  plan  for  implementation  of  the  relief  programme  in  collaboration  with  the State/District  authorities.  The  Master  Directions  of  RBI  has  enabling  provisions  for  relaxed security/collateral  on  affected  borrowers,  viz.  banks  may  not  insist  on  additional  collateral  for restructured  agricultural  loans,  credit  should  not  be  denied  for  want  of  personal  guarantee; where existing security has eroded because of damage or destruction, assistance should not be denied merely for want of additional fresh security etc.

Banks  have  been  mandated  to  grant  consumption  loans  upto  Rs.10,000/-  to  existing borrowers  without  any  collateral.  However,  they  may  at  their  discretion  grant  collateral  free consumption loans beyond Rs.10,000/-.The rate of interest is required to be recovered as per the guidelines in the Bank's master direction on interest, on advances. Within the areas of their discretion, banks have, however, been mandated to extend concessional treatment to calamityaffected people by waiving penal interest and deferring compounding of interest.

It  was  decided  in  the  Special  SLBC  Meeting  that  the  date  to  be  reckoned  for restructuring of loans would be July 31, 2018. Consequent to the unprecedented, devastating flood  in  Kerala  during  2018  monsoon,  Reserve  Bank  of  India  (RBI)  gave  permission  to restructure the short term loans till 31 st October, 2018 which was extended to 31 st December, 2018 with the advice that no further extension will be granted. State Level Bankers' Committee (SLBC), Kerala requested RBI for the extension of the moratorium up to 31 st  December 2019 on agricultural  loans  and  loans  to  those  borrowers  whose  income  is  mainly  from  agriculture  and allied  activities.  RBI  permitted SLBC  to take  the  decision  to  extend  the moratorium period on already restructured loans.

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