Kochi: Union Bank of India (UBI) has announced a moratorium on agricultural loans. At a news conference here, UBI chief manager Paul Mathew said short-term loans will get a one-year breather, while medium- and long-term ones will get an extension of 15 months. The UBI decision follows a similar one taken by the state government to help the crisis-ridden agricultural sector of Kerala.

"UBI, the first bank to announce a moratorium, has gone a step ahead of the state governments stipulation in that the borrower needs to pay only a simple interest for the extended period. The relief is applicable to agricultural gold loans, too," Mathew said.

Loans, which had to be repaid during 1 April 2000 and 30 June 2001, could now be extended to 1 June 2002, and those from 1 July 2001 to 30 June 2002 could be repaid by 30 June 2003. For medium- and long-term loans the relief is for 15 months. Such borrowers now need to pay their instalments due between 31 March 2001 and 30 June 2002 after 1 June 2002. They need to pay a simple interest for this extended period.