• search

Convert loans of bird flu-affected firms to term loans: RBI to banks

Written by: Staff
|

Mumbai, Apr 4: The Reserve Bank of India (RBI) today instructed the commercial banks to provide relief to the bird flu-affected poultry firms by converting their principal loans and interest due on working capital loans, into term loans.

This term loan will be for a period up to three years with an initial moratorium of one year.

In its fresh guidelines announced here, RBI said, keeping in view the losses of income incurred by poultry firms due to culling of birds, as well as steep fall in the demand for poultry products and their prices, banks may consider extending the credit facilities to affected poultry units financed by them.

Principal and interest due on working capital loans, as also installments and interest on term loans which have fallen due for payment on or after the onset of bird flu (February 1, 2006) and remaining unpaid, may be converted into term loans.

The converted loans may be recovered in installments based on projected future inflows over a period up to three years, with an initial moratorium of up to one year.

The remaining portion of term loan may be rescheduled with a moratorium period up to one year, depending upon the cash flow generating capacity of the unit.

The rescheduling and conversion of loans may be completed on or before June 30, and these may be treated as current dues. The borrower will be eligible for fresh need-based finance, RBI said.

The relief measures, as above, may be extended to all accounts of poultry industry, which were classified as standard accounts as on March 31 this year.

The fresh RBI guidelines for poultry firms follows the Government directive that proposed to grant a one-time interest subvention of four per cent annually on the outstanding principal amount, as on March 31 this year.

The guidelines are also applicable to all State and district co-operative banks, RRBs and NABARD, the notification said.

UNI

For Daily Alerts

For Breaking News from Oneindia
Get instant news updates throughout the day.

Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X
X
We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Oneindia sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Oneindia website. However, you can change your cookie settings at any time. Learn more