Despite RBI’s disapproval, banks give hope for scheme on mining loans

NT NETWORK
PANAJI: Although the RBI’s rejection of the state government’s proposal to write off mining loans has come as a big blow to borrowers, several senior bankers in Goa said that the debt relief scheme cannot be given up for lost, as yet.
The final decision on the scheme, they said, is with individual bank boards and whether it is given the nod or refusal will only be decided after directors’ meetings.
Files relating to the recently-notified debt relief scheme of the government have been submitted to their head offices and board of directors’ verdict on the same is expected shortly, they said.
Bankers added that they are hopeful of boards’ go-ahead over the mining truck loans, but getting the okay on one-time settlement for barge loans appears unlikely. Mining truck loans, they explained, are of low-ticket and discretion on the write-off is at the regional level. However, barge loans which are over ` 1 crore per borrower will most likely get the thumbs-down.
The RBI at a recent meeting with state finance secretaries refused state government’s proposal to write off interest or principal on farm or other bank loans. However, bankers said the apex bank’s refusal does not imply total rejection by the lenders. While the RBI lays down the broader guidelines for OTS, banks have the freedom to decide on the implementation of it.
Officials said the debt relief scheme does not specify how much OTS each bank will offer and it only mentions the subsidy component.
At the SLBC meeting, the government had requested them to waive off 40 per cent of the outstanding as well as some of the interest as on September 30 2012 to which banks have not given their unequivocal consent.
The debt relief scheme for mining dependent people was notified on September 3 after which news broke out of RBI’s rejection of it, as it rejected schemes of other states.
The scheme is being criticised by all borrowers as being inadequate and barge owners are the most vocal opponents of it. Mining borrowers have said the scheme should offer 100 per cent OTS with a larger subsidy support from the government.
However, going by the statements of bank officials, barge owners will be the worst hit by the RBI’s disapproval to the scheme while truckers could find some relief.
Some banks said that they have already started OTS to few of their mining borrowers and lowered their outstanding mining loans.
The post Despite RBI’s disapproval, banks give hope for scheme on mining loans appeared first on The Navhind Times.

Source: The Navhind Times

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