CHENNAI: In a bid to recover bad loans running into Rs 1,500 crore from farmers, overdue for 15-20 years, the cooperation department has introduced a special scheme to settle debts at a fixed interest rate of 9%, as against original rates of 15-16%, and without incurring additional charges.
In a statement, Cooperation Minister K R Periyakaruppan said 4.73 lakh defaulters will benefit from the scheme and save borrowers to the tune of Rs 500 crore. The waiver scheme is applicable to those who defaulted on their loans completely as of December 31, 2022, said an official note on Thursday.
To avail the waiver benefit, borrowers must enter into an agreement with the bank/society by paying 25% of the outstanding balance within 90 days from December 12. “The remaining 75% of the payment can be paid in six instalments in six months,” said Periyakaruppan.
The minister said that non-performing assets of the banks not only diminish the lending ability of banks, but also impact the defaulters’ credit scores, preventing them from availing themselves of services from other banks.
Periyakaruppan highlighted that many properties of loan defaulters, worth several crores, have been mortgaged. “Many have approached us expressing that the interest rate for the loan at the time of disbursal was high. Farmers who intended to sell their properties for personal needs found it impossible to do so,” he added. “We have decided to waive all other charges if the defaulters are willing to pay the outstanding amount,” he said.