Press Information Bureau

Government of India

Ministry of Finance

27-April-2012 16:54 IST

Interest Free Loans to Farmers

The Agriculture Debt Waiver and Debt Relief Scheme (ADWDRS) 2008, was implemented in the country by Public Sector Banks, Private Sector Banks, Co-operative Banks, local area banks and Regional Rural Banks. The debt waiver portion of the scheme was closed on 30.6.2008. The debt relief portion of the scheme was closed on 30.6.2010.

As per the guidelines of the Scheme, the lending institutions shall not charge any interest on the eligible amount for any period after February 29, 2008. However, in the case of other farmers who defaults in paying his share of the eligible amount on or before June 30, 2009 and becomes ineligible for One Time Settlement (OTS) relief, the bank may charge interest for the period after June 30, 2009.

The Government has reimbursed Rs. 18287.16 crore to the State Cooperative Banks towards the implementation of the Scheme.

This information was given by the Minister of State for Finance, Shri Namo Narain Meena in written reply to a question in Lok Sabha today.

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DSM/SS/SL

Interest prohibition on eligible agricultural loans: lenders barred from charging interest post-scheme cutoff; exception for defaulting borrowers. The Scheme imposed an interest moratorium on eligible agricultural loans, barring lenders from charging interest on the eligible amount after February 29, 2008, while permitting banks to charge interest after June 30, 2009 for borrowers who defaulted on their share and lost One Time Settlement eligibility; the Government reimbursed cooperative banks to support implementation.