Mumbai, Feb 29 (UNI) Financial institutions today described the proposal of loan waiver for three crore small and marginal farmers in the Union Budget 2008-09 as a ''clean-up of bad loans'' for public sector banks.
Commending the proposal, presented by Union Finance Minister P Chidambaram in New Delhi, Bank of America Managing Director and Country Manager Vishwavir Ahuja said here that the amount of Rs 60,000, which will be reimbursed by the government, should be taken as ''clean-up of bad loans'' for the banks as the money was stuck with the farmers and was a non-performing asset.
''Now, this idle money will be back to the banks, the same amount which was not supposed to be back,'' Mr Ahuja said, adding, ''This move will support the banks to bring down their non performing assets in the retail loan segment.'' Supporting the same sentiments, Housing Development and Finance Corporation (HDFC) Chairman Deepak Parekh said, ''It should be taken in a very positive manner that the government will reimburse the loan of farmers which will help the banks to reduce their NPA in the segment.'' Meanwhile, J M Financial Group Chairman Nimesh Kampani said, ''The amount will go back to the public sector banks which will support the sentiments of the bank's share holders and the banks would gain in the stock market.'' UNI PP NM RL AS1632