Finance Minister Nirmala Sitharaman on Saturday said banks have provided the three-month loan moratorium facility to around three crore farmers for loans totalling Rs 4.22 lakh crore.
In a series of tweets, she said eligible borrowers were also provided emergency credit lines and their working capital limits were increased by public sector banks (PSBs).
“Since March 2020, 9.13 crore farmers have been paid Rs 18,253 crore under PM-KISAN during the #lockdown. About three crore farmers with agri loans totaling Rs 4,22,113 crore availed the benefit of the 3-month loan moratorium,” Sitharaman said on her official Twitter handle.
The Reserve Bank of India (RBI), on March 27, had allowed banks to grant moratorium on term loans, scheduled to be paid between March 1 and May 31.
Working capital limit hike, credit lines to ease stress
The government expects the economy to recover as public sector banks step up lending support to farmers, retail customers, corporates and MSMEs. A three-month moratorium on loan repayments to borrowers — especially in the agriculture sector — would help them overcome difficulties brought about by the economic shutdown. Enhancement in working capital limits and credit lines being provided by state-owned banks are other steps being taken to alleviate the pain in the stressed sectors.
Under the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme, each farmer gets Rs 6,000 of income support in a year in three equal instalments directly into their bank account.
The government had, in March, announced front-loading the release of the first instalment under the scheme to help them during the lockdown imposed to prevent the spread of COVID-19.
“PSBs contacted more than 95% of borrowers eligible for emergency credit lines & working capital enhancements between March 20 – May 6. The amount sanctioned jumped to Rs 54,544 crore, more than double the amount 2 days ago. Number of cases covered more than tripled.,” the FM tweeted.
Sitharaman’s comments come two days after she said that the “economy is poised to recover” as PSBs have stepped up loan sanctions in March and April, and these funds will be disbursed soon after the lockdown is lifted. State-owned lenders have proactively provided the three-month loan moratorium facility to over 3.2 crore accounts after the scheme was announced by the Reserve Bank.
A total of Rs 5.66 lakh crore of loans were sanctioned during March-April 2020 to MSME, retail, corporate and agriculture sectors, while another over Rs 1 lakh crore of funds have been sanctioned to non-banking financial companies and housing finance companies, she had said on Thursday.
The central government has also provided support to states from the Rural Infrastructure Development Fund (RIDF).
“Support of Rs 4224 cr was provided to states under RIDF during March, 2020 for promoting rural employment through infra projects. Working capital limit of Rs 6700 cr has been sanctioned for procurement of agriculture commodities to State Govt entities since Mar, 2020,” Sitharaman said in a tweet.
Managed by the National Bank for Agriculture and Rural Development (NABARD), the RIDF is created through contributions from domestic commercial banks to the extent of their shortfall in stipulated priority sector lending to agriculture.
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