Dashing the hopes of AP chief minister Chandrababu Naidu, the Reserve Bank of India on Monday informed the state that it cannot reschedule loans taken by farmers against gold ornaments. This will be a major setback to the AP government which was banking on massive relief from the RBI with regard to farm loan waiver. At the same time, RBI has agreed to reschedule crop loans by giving relaxation to the existing rules.
RBI’s decision will be a bolt from the blue for AP government as the move would deprive it over Rs 35,000 crore relief. Lakhs of farmers who have taken loans by pledging their gold will not get any relief from the apex bank. RBI observed that secured loans like gold loans are not eligible for the reschedule.
The staggering gold loan waiver has become a sensitive issue to Naidu as most of the women voted for him with an expectation that their pledged gold ornaments would come back without any repayment. “RBI is not willing to extend relief to gold loans stating that it had never rescheduled loans taken against gold. Since the amount involved is huge, we have to find out alternative ways to pay the bill,” a senior official in the government said.
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