RBI instructs banks on relief measures to poultry industry

Mumbai, Apr 4 (UNI) Reserve Bank of India (RBI) has instructed the commercial banks to convert the principal loans and interest due on working capital loans of the bird flu-affected poultry firms into term loans, for a period upto three years with an initial moratorium of one year.

In its fresh guidelines announced today, 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 upto three years, with an initial moratorium of upto one year.

The remaining portion of term loan may be rescheduled with a moratorium period upto 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 this may be treated as current dues.

The borrower will be eligible for fresh need based finance.

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

The fresh RBI guidelines for poultry firms follow 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.

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

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