Farm loan rescheduling in Andhra Pradesh, Telangana yet to get RBI nod

Hyderabad: The Reserve Bank of India is yet to give its approval for the proposed rescheduling of farm loans in Andhra Pradesh and Telangana, its Deputy Governor R  Gandhi said here on Monday.

Contrary to claims made by the Andhra Pradesh government that RBI had agreed to the farm loan rescheduling, Gandhi indicated that there are certain guidelines in place for the rescheduling of farm loans.

He said discussions are still going on with respective state governments, which are yet to submit full details to the central bank with regard to the rescheduling.

"There are certain standing instructions available for banks on how to deal with natural calamities (for rescheduling farm loans). Reserve Bank instructions are there. Banks will be able to restructure loans based on those instructions taking approval from the SLBC.

"That mechanism is already there. Beyond that if anything is there.... Governments had  some rounds of discussions. Still they have to come back with full details," Gandhi told reporters when asked about the RBI's decision on the farm loan rescheduling, on the sidelines of a programme organised by FICCI.

AP Finance Minister Yanamala Ramakrishnudu had earlier said the RBI had agreed to reschedule farm loans in the state when the Chief Minister N Chandrababu Naidu spoke to the RBI Governor.

"The CM (Naidu) was informed that loans will be rescheduled. The RBI will write a letter on the details. Once the letter is received, the government will take steps," Ramakrishnudu had told reporters recently.

Telangana Finance minister Rajender Etela, who was the chief guest at the programme, said the RBI has given a 'positive indication' to the farm loan rescheduling in his state.

"We have a cabinet meeting on July 16. We will come out with all details regarding the  farm loan waiver scheme," Etela said.

As part of fulfilling poll promises, Andhra Pradesh Chief Minister N Chandrababu Naidu and his Telangana counterpart K Chandrasekhar Rao have initiated a process to implement loan waiver schemes for farmers.

While Rao has announced waiving loan up to Rs 1 lakh, Naidu has set up a committee of experts to work out the total amount and modalities to implement the scheme.

Though the exact amount of loan that would be waived in Andhra Pradesh has not been worked out so far, it's estimated to be in thousands of crores of rupees. Andhra Pradesh, which virtually has "empty coffers", is expected to have over Rs 15,000 crore deficit budget during the current financial year.