With retrospective effect: Collector
Tuticorin: The Government plans to give concessions on interest to non-farm credits disbursed through cooperative banks in the district under Interest Reduction Scheme (IRS).
According to Collector R. Palaniyandi, the interest rates of the non-farm sector loans, outstanding to about Rs. 10 crore as on December 27, 2006, have been slashed from 18 to 12 percent, with retrospective effect from March 31, 2001.
The decision would benefit people, who took loans from the primary agricultural cooperative banks, the central cooperative bank, and the primary cooperative agricultural and rural development banks.
Dr. Palaniyandi said those who wanted to avail this benefit should pay 25 percent of the dues before March 31 this year.
Moreover, they should execute an agreement with the bank, promising to pay back the remainder before June 30 this year. The penal interest would be waived for those who had defaulted while paying instalments.
This would be done by calculating 12 percent as the interest rate for the amounts outstanding on March 31, 2001, and the total amount arising from the waiver of penal interest, and the reduction would be adjusted against the amount due from the borrowers.
Hereafter, non-farm sector loans would carry 12 percent interest and the penal interest would be 1.5 percent, in case of default, he added.