Govt to give Rs10,000 cr to banks towards debt waiver scheme

Govt to give Rs10,000 cr to banks towards debt waiver scheme

New Delhi: The government is likely to release Rs10,000 crore to banks and financial institutions as part of compensation for writing off loans under the farm-debt waiver scheme.

“The finance ministry is considering to release Rs10,000 crore to lending institutions in a month or so," official sources said.

This would be over and above Rs5,000 crore which was given earlier this fiscal to the banks and financial institutions towrads the debt waiver scheme.

The government had announced that it would pay Rs15,000 crore to the lenders during the current fiscal.

The debt waiver scheme, announced by the government in 2008-09 Budget, was implemented by 30 June , 2008, entailed a burden of Rs71,000 crore on banks and financial institutions which the government promised to reimburse in stages.

During 2008-09, the government gave a total of Rs25,000 crore to lending institutions as compensation towards the the agricultural debt waiver and debt relief scheme.

Under the debt waiver and relief package, for small and marginal farmers (with holdings up to 2 hectare) there was a complete waiver of all loans due on December 31, 2007 and which remained unpaid until 29 February, 2008.