Reserve Bank of India has doused the hopes of farmers and Dwakra women groups by stating that they are against the loan waiver scheme of Andhra Pradesh government.
In a letter to the government of Andhra Pradesh, they have clearly mentioned that they are against waiver of loans as it would spawn a culture of nonpayment and would adversely impact the financial sector.
It said that such moves will indirectly affect the morale of people who repay the loans honestly.
RBI has also specified that it was against slotting the loans into bands. Incidentally, RBI has also mentioned that waiver of loans could be done only after the principal amount is repaid.
The latest decision by RBI is bound to put the Andhra Pradesh government in a rather embarrassing situation as it was their ticket to power during the recently concluded general elections.
However, the officials say that such letters by RBI are quite common and have reiterated that Chandra Babu has already talked to the Centre regarding the issue.
In all, the waiver of loans would amount to Rs 54,000 crore in Andhra Pradesh, which is the biggest by any individual state.
