Centres support through subsidies for farmers not to benefit banks
The Dollar Business Bureau Governmental support through subsidies may not significantly benefit banks as the amount of support (Rs. 2,500/acre) to be provided is marginal compared with the extent of the losses (Rs 20,000/acre). Also, it is unlikely that the support money will be used by impacted farmers to repay bank loans, said a rating agency report. The government has announced 10% of State Disaster Relief Fund to be contributed to farmers for natural calamities, which translates into about Rs 2,500/acre. The government is also contemplating a loan restructuring or interest subvention effort for affected farmers, aimed at providing relief to the farmers’ debt obligation. While this may reduce the NPL (non-performing loan) classification of these loans, we expect the loan ...
