Banks to get Rs.250 bn to meet farm loan waiver costs

New Delhi, Aug 27 : The government will give Rs.25,000 crore (Rs.250 billion) to banks to help them make up the loss incurred on account of farm loan waiver, said a senior official Wednesday.

“Rs.25,000 crore will be released to the lending institutions (against the debt waiver) when parliament meets to approve the supplementary budget,” said finance secretary Arun Ramanathan.

Ramanathan, who briefed the media after Finance Minister P. Chidambaram reviewed the performance of regional rural banks (RRBs), said the government was yet to take a decision on the suggestion by the banks that payment be made against interest from March 1.

About Chidambaram's brief to the RRBs, Ramanathan said he emphasised the need for computerisation of RRB branches and providing better training to the employees.

“The finance minister was satisfied with the performance of the RRBs,” Ramanathan said.

He said the number of RRBs would come down to 79 from the existing 88 after 12 RRBs were merged and reduced to five.

--IANS