Reserve Bank of India Governor Raghuram Rajan Wednesday assured the Telangana government that he will soon sort out the issue relating to banks not pushing fresh farm loans to farmers.
Chief Minister K. Chandrasekhar Rao raised this issued when the central bank chief called on him here.
According to an official statement, the chief minister told the RBI governor that the bankers are not pushing the way they are supposed to do with regard to fresh farm loans to the farmers. “The governor said that he will look into it and soon the issue will be sorted out,” said the statement.
When the chief minister sought funding for the restoration of tanks in the state, Rajan said this could be considered under the proposed window for rural infrastructure. Officials told him that the restoration of irrigation tanks required Rs.25,000 crore.
The chief minister also wanted the banks to finance improvement of green cover in Hyderabad.
The newly-created state urged RBI to have a special view on Micro and Small Enterprises (MSEs). The RBI governor said they propose to start Receivable Finances system through which they would consider supporting MSEs.
Rajan responded positively to the request to consider funding to develop industrial estates in the state.
As Andhra Pradesh Chief Minister N. Chandrababu Naidu is camping in cyclone-hit coastal region, the RBI governor called on state Finance Minister Y. Ramakrishnudu and senior officials.
Rajan lauded the Farmers Empowerment Corporation (FEC), an initiative of the state government to roll out a debt relief scheme for farmers.
Under this initiative, the state government would pay upfront an amount of Rs.5,000 crore to banks and repay the balance farmers’ loans in the next four years at a rate of 20 percent per annum.
Official said Rajan agreed that FEC is the best solution to help farmers come out of the crises.
The minister told reporters that they explained the problems faced by the state post-bifurcation and that the RBI governor assured that the central bank would extend all possible cooperation in the efforts to rebuild the state.
Rajan also responded positively to the state’s request for support to help the state to overcome the devastation caused by cyclone Hudhud.
Seeking the central bank’s support, the officials explained the the vulnerability of the state to natural calamities.
On a request of the finance minister, Rajan said the RBI was ready to open its regional headquarters at Vijayawada, the proposed capital of the state.
The RBI chief also evinced interest in state government’s proposal to raise Build Andhra municipal bonds for building the new capital.