New Delhi, March 15: India`s Largest public sector bank State Bank of India (SBI) has announced a one-time farm loan settlement scheme worth 6,000 crore rupees primarily for tractors. SBI has said that it would allow one-time settlements for tractor and farm equipment loans that make up about 6,000 crore Rs of doubtful and loss cases on its books.
Managing director national banking at SBI Rajnish Kumar, has informed that the bank is willing to take an up to 40% haircut on farm equipment loans. The offer would be applicable for loans up to 25 lakh rupees. The customers can approach the lender up to 31st of this month for the settlement.
The MD said other agriculture loans like kisan credit cards and other term-loans for tractors and farm loans may also be covered under the scheme. Kumar informed that SBI's total farm loan portfolio is 1.25 Lakh Crore rupees and tractor loan book is about 6,000 crore rupees.
The SBI will also allow these borrowers to settle their crop loans but individual crop loan borrowers are not part of the scheme. The decision to focus on loan recovery has been taken in view of the large amount of gross non-performing assets (NPAs) that India’s largest lender has accumulated on its books over the last few quarters.