For the farmers who have been anxiously waiting for the waiver of loans, the latest statement made by Andhra Bank chairman Rajendran comes as a huge blow. He has made it clear that if the farmers do not repay their loans, they will be declared as defaulters.
Speaking to a media channel, Rajendran confessed that the farmers who are unable to repay their loans will be labeled as defaulters and this could mean extra burden on the banks.
If the farmers fail to repay loans in the quarter between April and July, then they will end up as loans in the bank’s balance sheets and such farmers would come under willful defaulters’ list, he revealed. Hence, lakhs of farm loan accounts would then make it to the list of non-performing assets, he said.
He feared that this could force the bank to make higher provisions for NPAs, unless and until the scheme is announced before the balance sheets are prepared.
Incidentally, the problem is common to both Telangana and Andhra Pradesh governments. So, if the Telangana government does not take the necessary steps, it is bound to create huge trouble for the farmers in Telangana.
