What changed
The government extended the OTS payment deadline for 'other farmers' (with >2 hectares) under the Agricultural Debt Waiver and Debt Relief Scheme 2008 by six months, from December 31, 2009 to June 30, 2010. Banks can accept less than 75% if they bear the difference, but the government will only reimburse 25% of the actual eligible amount without interest for the extension period.
What it means for you
Banks must process additional debt relief claims for cases settled between January 1, 2010 and June 30, 2010 (including grievance redressal cases up to July 31, 2010) as separate 'Additional Final Claims – Debt Relief - Not Eligible for Interest'. These claims must be submitted to RBI by June 30, 2011, and no interest reimbursement will be provided by the government for this period.
What you must do
- Extend OTS payment deadline for eligible 'other farmers' to June 30, 2010 and allow payment in installments.
- Submit separate 'Additional Final Claims – Debt Relief - Not Eligible for Interest' to RBI by June 30, 2011, certified by Central Statutory Auditors.
- Ensure wide publicity of the scheme extension to maximize farmer benefits.
- Do not claim interest from government for the six-month extension period; bear any shortfall below 75% OTS amount internally.
Who it affects
All Scheduled Commercial Banks (including Local Area Banks), Other lending institutions under ADWDRS 2008, 'Other farmers' (with >2 hectares land) eligible under the scheme
What is the new deadline for 'other farmers' to pay 75% of overdues under OTS?
The deadline is extended from December 31, 2009 to June 30, 2010.
Will banks receive interest from the government for the six-month extension?
No, the government will not pay any interest to lending institutions for this extension period.
How should banks submit claims for cases settled during the extension period?
Banks must submit separate 'Additional Final Claims – Debt Relief - Not Eligible for Interest' to RBI by June 30, 2011, certified by Central Statutory Auditors.