A special cabinet meeting, convened to discuss the drought situation and price rise, decided to impose a one year moratorium on loans taken from banks and to waive interest for this period, Chief Minister Oommen Chandy told reporters here tonight.
He said co-operative banks would implement the government directive with immediate effect and nationalised banks would also be asked to take a similar decision. "It has also been decided to reschedule loans after one year," he said.
Nationalised scheduled banks would also be requested to waive loans for the same period, he said, adding the state level banker's conference here on Feb 2 would consider these matters. Recovery measures during this period should also be frozen, Chandy said.
The chief minister said that local self governments had been granted permissive sanction to utilise funds to implement measures to overcome the drought. Panchayats, municipalities and corporations would be given Rs five lakh, Rs 10 lakh and Rs 25 lakh, respectively, he said.
Chandy said Rs 85 crore will be released for districts to implement drought relief operations, Rs 79 crore and Rs 13 crore for construction of bunds and digging borewells and Rs 52 crore for repair works of water authority.
"Funds will be allotted from the budget and an additional amount will be provided," he said.