New AP states to write off over Rs1,00,000 crore bank loans

Banks in Telengana and Andhra Pradesh are on a high with the announcement of a debt waiver scheme for farmers in the two states and have now sought clarity on the issue from the soon-to-be formed governments on the proposed debt-waiver scheme.

The Andhra Pradesh and Telangana governments are planning to waive loans amounting to more than Rs1,00,000 crore, which could be the biggest loan waiver ever, according to bankers.

The Telugu Desam Party (TDP) returned to power after a gap of 10 years on the promise of waiving loans of a total Rs82,000 crore taken by farmers and self help groups.

The Telangana Rashtra Samithi (TRS), which is set to form the first government in Telangana, had also promised to waive farmers' loans up to Rs1 lakh, totalling about Rs20,000 crore.

Banks in Andhra Pradesh, which are stuck with loans to the tune of Rs1,37,172 crore, have now sought clarity on the nature of eligibility and the quantum of loans to be waived before the scheme could be could be implemented.

Data available with State Level Bankers' Committee (SLBC) show Andhra Pradesh and Telangana have outstanding loans of Rs87,612 crore and Rs49,560 crore, respectively, said CVR Rajendran, CMD, Andhra Bank, and president of SLBC, while addressing the last SLBC meeting of united Andhra Pradesh on Thursday.

SLBC, however, said the figures may vary after the new governments are formed as these have to be authenticated by the new governments. ''Let's not discuss the figures. They are threatening and should be kept away from the media,'' Rajendran said, adding that it could be lower than the projected amount.

He said banks in united Andhra Pradesh have surpassed annual farm credit target with loans of about Rs73,494 crore for fiscal 2013-14 against the target of Rs67,224 crore set for the year.

State government officials said banks along with the state governments would draw up an action plan to implement the debt-waiver.