What changed
The deadline for 'other farmers' to pay 75% of overdues under the One Time Settlement was extended from December 31, 2009 to June 30, 2010. Banks can accept less than 75% if they bear the difference, but government reimbursement remains at 25% of actual eligible amount. No interest will be paid by the government for this six-month extension.
What it means for you
Banks must process additional claims for debt relief cases settled during the extension period separately, clearly marked as not eligible for interest. This impacts cash flow as the government will not compensate for the interest foregone during the extended period. Banks need to ensure timely submission of claims to avoid delays in reimbursement.
What you must do
- Submit final claims for debt relief arising till December 31, 2009 (including grievance cases till January 31, 2010) to the Regional Office by June 30, 2010, certified by statutory auditors.
- Prepare and submit separate additional final claims for debt relief cases settled from January 1, 2010 to June 30, 2010 (including grievance cases till July 31, 2010) by June 30, 2011, clearly marked as 'Additional Final Claims - Debt Relief – Not Eligible for Interest'.
- Give wide publicity to the extended OTS deadline so that eligible farmers can avail benefits.
- Ensure that any amount accepted below 75% of eligible amount under OTS is borne by the bank and not claimed from government or farmer.
Who it affects
Primary (Urban) Co-operative Banks, All Public Sector Banks, Other lending institutions covered under ADWDRS 2008, Eligible 'other farmers' with more than two hectares of land
What is the new deadline for farmers to pay 75% of overdues under OTS?
The deadline has been extended from December 31, 2009 to June 30, 2010 for 'other farmers' under the Agricultural Debt Waiver and Debt Relief Scheme, 2008.
Will the government pay interest for the extended period?
No, the Government of India will not pay any interest to lending institutions for the six-month extension period while reimbursing the 25% amount.
What should banks do if they accept less than 75% from farmers under OTS?
Banks can accept less than 75% of the eligible amount, but they must bear the difference themselves and cannot claim it from the government or the farmer.