Transfer outstanding crop loans to government account, Maharashtra says to banks-Business News, Firstpost

A government resolution (GR) dated May 22 called for banks to display the current outstanding loans from farmers as state government contributions.

Bombay: In a rare decision amid the unprecedented situation caused by the coronavirus pandemic and its impact on the economy, the government of Maharashtra has ordered banks to transfer outstanding crop loans to the state account in an attempt to make farmers eligible for new credit.

A government resolution (GR) dated May 22 asked banks to display the current outstanding loans from farmers as state government contributions.

“This decision will clear the accounts of the farmers and they will become eligible for a new crop loan. The decision is applicable for the crop loan in progress on April 1 of this year. The principal and interest will be paid by the government of the State “, says the order.

“This is a very rare decision taken by the state government. The government has given its guarantee to some cooperative enterprises but rarely has it taken the burden of the farmers,” a senior official from the cooperation department said on Sunday. the state.

Impact of COVID19 Transferring Outstanding Harvest Loans to Government Account, Maharashtra Says to Banks

Representative image. Reuters

The GR said the government loan exemption program was partially implemented due to the coronavirus epidemic followed by containment.

“About 60% of farmers have been covered by the program so far. As there is no funds from the state, some 11.12 lakhs account holders have not yet received 8,100 crore in rupees, ”the official said.

Explaining the rationale for issuing the RG, he said the whole concept of forgetting the loan was to write off farmers’ debts.

“When NABARD grants loans, most of the state’s farmers will become eligible (due to the government’s decision),” the official said.

Previous University debt and equitable distribution | Fox Rothschild LLP
Next New “second draw” PPP loans under the Self-Employed / Sole Proprietorship Economic Assistance Act | Burr & Forman