RBI directs all commercial banks not to recover crop loans

Mumbai: The Reserve Bank of India (RBI) has directed all commercial banks not to recover crop loans, including the accrued interest in this fiscal, from farmers in the drought-affected states.

“In consultation with the central government, it has been decided not to effect any recovery of crop loans, including interest during this financial year, in states affected by the failure of the Southwest monsoon,” the RBI said.

Prime Minister A B Vajpayee had also announced that the government will not recover crop loans this year, and will set up a Rs 500-crore corpus to provide relief to plantation growers during depressed market conditions.

Following this, the RBI said all scheduled commercial banks have been advised that for kharif 2002-03, reliefs may be extended to farmers affected by drought in the districts notified by the respective states.