Debt Relief Scheme: Extended First Instalment Date for Other Farmers

What changed

The Government of India extended the last date for repayment of the first instalment by 'other farmers' under the Debt Relief Scheme from September 30, 2008 to March 31, 2009. The due dates for the second and third instalments remain unchanged at March 31, 2009 and June 30, 2009 respectively. Additionally, the one-month grace period for maintaining standard asset classification is now available only for the first two instalments due on March 31, 2009, and not for the final instalment.

What it means for you

RRBs must update their systems to reflect the extended first instalment date for eligible 'other farmers' under the Debt Relief Scheme. The grace period for standard asset classification is limited to the first two instalments; for the third instalment, full payment must be received by June 30, 2009 to avoid classification as non-performing. This impacts provisioning and capital adequacy calculations for RRBs.

What banks were required to do at the time

• Update internal systems to reflect the new first instalment due date of March 31, 2009 for 'other farmers' under the Debt Relief Scheme.
• Ensure that the one-month grace period for standard asset classification is applied only to the first two instalments due on March 31, 2009.
• Communicate to branches that no grace period is allowed for the third instalment; full farmer share must be paid by June 30, 2009 to maintain asset classification.
• Review and adjust income recognition, asset classification, and provisioning norms in line with the updated circular.

Who it affects

Regional Rural Banks (RRBs), Farmers classified as 'other farmers' under the Debt Relief Scheme, Bank branches handling agricultural loan accounts