An expert panel appointed by the Government of Punjab will meet the representative of various banks in Punjab to discuss the problem of nonpayment of bank loans by farmers.
The meeting with bankers and expert panel will happen on July, 27, 2017 where the panel will focus on assessing the impact of agricultural debt and find out ways to tackle farm debt waiver.
The Government of Punjab has formed the expert panel under the chairmanship of T Haque who was the former chairman of the Commission for Agricultural Costs and Prices. Manpreet Singh Badal the current finance minister of Punjab may also join the meeting.
The panel is expected to seek suggestions from bankers regarding how to implement the debt waiver scheme. As reported by the Economics Time, the Government of Punjab may suggest “haircut” to resolve the issue nonpayment of loans by farmers. A senior official of Punjab National Bank revealed it yesterday. The term haircut refers to financial loss; it means giving up a portion of debt or to accept a less percentage of debt.
Considering the increased number of loan defaulters in Punjab, banks have requested the Punjab Government to take quick steps to implement the loan waiver program. Banks have already stopped offering fresh lending to borrowers who had failed to repay loans in the past.
Banks are yet to recover an outstanding amount of Rs. 36,000 crore from small and marginal farmers in Punjab. However, the Punjab government has planned to own up Rs. 9,500 crore as loan waiver within a time frame of 4 to 5 years based on the report prepared by the expert panel.