RBI/2006-07/156
RPCD.PLFS.NO.BC. 31 / 05.04.02 /2006-07

October 18, 2006

The Chairman and Managing Director/Chief Executive Officers
All Scheduled Commercial Banks.

Dear Sir,

Package of relief measures for the debt stressed farmers of 25 districts in the states of Andhra Pradesh, Karnataka & Kerala

For mitigating the distress of farmers in the following 25 debt stressed districts of Andhra Pradesh, Karnataka and Kerala, the Union Government has approved a package which, besides other items, has a component relating to agriculture credit.

3. The burden of waiver of overdue interest will be shared equally by the State and Central Governments. While apportioning the overdue interest as above, due care will be taken to offset releases if any, already made by the State Government on this count.

4. You are, therefore, advised to ensure that all the farmers' loan-accounts in the specified districts, which are overdue as on July 01, 2006, are rescheduled on the lines of the package and the interest thereon (as on July 01, 2006) is fully waived. Fresh finance may be ensured to such farmers. The total amount of credit envisaged to be released by banks in the three States will be allocated by the respective SLBC Convenors among the banks functioning in the districts.

5. The amount of interest waived (State wise) may be advised to the SLBC Convenor Bank of the respective State and to us in a consolidated manner in the enclosed format (Annex – I) in order to enable us to reimburse the same. While the branches may provide information to the Controlling / Head Office as per Annex – III, the latter may maintain branch-wise information in the format given in Annex –II for the purpose of RBI Inspection and Audit.

6. The progress in the implementation of the package will be monitored at the district level through the DLCC forum and at the State level through the SLBC. Besides, a special team from NABARD and lead bank shall be deputed to ensure timely restructuring/ reschedulement of the loan accounts to enable early flow of fresh credit.

Yours faithfully,

(C. S. Murthy)
Chief General Manager-in-Charge

(Claims to be submitted State-wise)

We hereby certify that the amount of interest being claimed as shown above, have been correctly calculated in conformity with the Reserve Bank of India Circular letter RPCD. No. PLFS.BC. 31 /05.04.02/2006-07 dated October 18, 2006. We undertake that in the event of any inaccuracy detected later during audit or otherwise, we shall immediately refund to the Reserve Bank any excess amount received by us.

(Authorised Signatory)

Place

Date

ANNEX III

Name of the branch

Branch Code