What changed
The government extended the repayment deadline for 'other farmers' under the Debt Relief Scheme, allowing a single 75% payment by June 30, 2009, instead of three instalments. Banks can now accept less than 75% under OTS, provided they bear the difference and claim only 25% of the actual eligible amount from the government.
What it means for you
This gives RRBs more flexibility to settle eligible farm loans quickly, reducing NPAs and freeing up credit lines. Banks must ensure they do not claim the shortfall from the government or farmers, and must adjust provisioning accordingly. The move aims to accelerate relief to farmers and improve their access to fresh finance.
What you must do
- Update internal OTS processing to accept single 75% payment from 'other farmers' by June 30, 2009.
- If accepting less than 75%, ensure the shortfall is written off by the bank and not claimed from government or farmer.
- Submit supplementary claims to the government for any changes due to grievance orders up to July 31, 2009.
- Maintain existing provisioning norms as per earlier circulars; no change in that regard.
Who it affects
Regional Rural Banks (RRBs), Other lending institutions covered under ADWDR Scheme, Farmers classified as 'other farmers' under the scheme
Can a farmer pay the 75% OTS amount in one go instead of three instalments?
Yes, the government has allowed 'other farmers' to pay their entire 75% share as a single instalment by June 30, 2009, to qualify for the 25% debt relief.
What if a farmer pays less than 75% under OTS?
Banks can accept less than 75%, but they must bear the difference themselves through write-off. The government will only pay 25% of the actual eligible amount, not the full 25% of the original overdue.
Are there any changes to provisioning norms?
No, all other terms including provisioning remain unchanged as per earlier circulars.