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Home / Breaking News / ENTIRE PENAL INTEREST TO BE WAIVED ON PAYMENT OF 20 PERCENT OF OUTSTANDING RESTRUCTURED AMOUNT OF THE BORROWER: SUKHJINDER SINGH RANDHAWA

ENTIRE PENAL INTEREST TO BE WAIVED ON PAYMENT OF 20 PERCENT OF OUTSTANDING RESTRUCTURED AMOUNT OF THE BORROWER: SUKHJINDER SINGH RANDHAWA

Chandigarh (Raftaar News Bureau) :The Punjab State Cooperative Agricultural Development Bank has taken some major policy decisions to revive the PADBs in the State of Punjab and to provide some relief to the distressed farmers of the PADBs.

Disclosing this here today, Cooperation Minister, S. Sukhjinder Singh Randhawa said that the bank has launched a loan restructuring scheme for the defaulter borrowers who could not pay their installments in the past few years because of their distressed financial position. “Under this scheme, the loan account of the defaulter borrower will be rescheduled enabling him to repay his loan in easy installments and get relief from any legal action initiated by the Bank for recovery of loan”, said the Minister adding that a provision has been made under this scheme that if a borrower pays 20% of his outstanding amount at the time of restructuring, the entire penal interest outstanding in his account will be waived. Moreover, the borrower will be eligible for a subsequent loan if he regularly pays 1/3 of the restructured loan amount.

Pointing out further, S. Randhawa said that the bank has also decided to provide a six month moratorium to standard loan accounts on unpaid loan installments due for repayment during the peak of disruptions caused by Covid-19 pandemic i.e. 01 March, 2020 to 31 August, 2020. This will provide a relief to the borrowers who could not pay their installments in this period and these will be deferred by six months in such a way that the residual tenure of loan account will be shifted, revealed the Minister.

The Registrar, Cooperative Societies, Vikas Garg said that the bank has also extended the ongoing scheme of waiver of penal interest till 31 March 2021.Under this scheme, the entire penal interest outstanding in the borrower’s loan account is waived if the borrower repaid the entire defaulter amount or closes his loan account. This scheme was launched in October 2020 and about 4000 farmers have benefitted from this scheme and availed a relief of about Rs. 1.23 crore.

At present out of 89 PADBs, only 30 PADBs were advancing fresh loans to the farmers in Punjab. Now the Bank has revised its Audit Classification norms and now the number of such Banks which can advance fresh loans will go up to 70 enabling more farmers to avail financial assistance from the PADBs, said the Registrar adding that the bank has also made an amendment in its loan policy so that a farmer can ordinarily avail of up to two loans rather than just one depending on his repaying capacity. He also averred that the Bank has made it mandatory that a loan applicant should have a minimum CIBIL score of 650 to ensure a healthy loan portfolio and to instill a good repayment culture.

Notably, In November, 2020, S. Sukhjinder Singh Randhawa met the Chairman NABARD at Mumbai with a delegation of officers comprising RCS Vikas Garg, MD, PADB Charandev Singh Maan, and made a strong case for a package aimed at revival of the bank. Subsequently, NABARD granted a package of Rs. 750 crore to revive the bank.

Consequently, the minister held a meeting with senior officers of the Bank and motivated them to work out a strategy to revive the PADBs. The Bank devised a multi-pronged strategy including some policy decisions in the interest of farmers as well as the bank which was approved by the Board of Directors of the PADB under the chairmanship of Kamaldeep Singh with final approval granted by the RCS.

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