RBI/ 2006-07/ 174
RPCD.PLFS. BC. No. 32 /05.04.02/ 2006-07
November 13, 2006
The Chairman /Managing Director/ Chief Executive
Officer
All Scheduled Commercial Banks
Dear Sir,
Relief Measures to assist Distressed
Farmers
Please refer to paragraph 119
of the Mid-term Review of Annual Policy Statement for the year 2006-07 (copy
enclosed).
2. At present the benefits of OTS
schemes are not available for farmers, whose accounts have earlier been rescheduled/converted
on account of natural calamities as such accounts are treated as current dues.
In reality, however, the condition of these farmers is not much different from
those covered by these schemes.
3. In order, therefore, to assist
such distressed farmers as also farmers defaulting on their loans, due to circumstances
beyond their control, banks may frame transparent OTS policies for such farmers,
with the approval of their Boards.
4. Please acknowledge receipt.
Yours faithfully,
(C.S. Murthy)
Chief General Manager-in-Charge
Annex
Paragraph 119 of the Mid-term review
of Annual Policy for the year 2006-07:
"The Working Group (Chairman:
Prof. S.S.Johl), constituted by the Reserve Bank to suggest measures for assisting
distressed farmers including provision of financial counselling services and
introduction of a specific Credit Guarantee Scheme under the Deposit Insurance
and Credit Guarantee Corporation (DICGC) Act for such farmers, submitted its
interim report in October, 2006. In the light of the recommendations of the
Group and with a view to ensuring transparency in implementation of the one
time settlement (OTS) scheme, it is proposed that:
• banks, with approval of their
boards, may formulate a transparent policy for providing OTS facility to those
farmers whose accounts have been rescheduled/ restructured due to natural calamities
as also those who have defaulted on account of circumstances beyond their control." |