Crop loan waiver: State speeds up the process

The State government, it is reliably learnt, has speeded up the process of enabling banks to extend the crop loan waiver in a week or two by firming up series of resource mobilisation steps that include securitisation of surplus cash flows of A.P. Beverages Corporation Limited (ABCL).

The other significant measures to be initiated soon are transfer of farmer’s loans under non-performing assets segment to Asset Reconstruction Companies (ARC), issuance of subsidy certificates by the State government to farmers having the ability to pay off their loans and monetisation firstly, against future exports of red sanders and secondly, the current/future receivables from port royalties.

Sources said the government’s objective is aimed at offloading Rs.10,000 crore as early as possible and ensure that the farmers get the waiver benefit beginning with the poorest of them. It calculated that 40 per cent of such account holders had Rs. 85,000 as outstanding loan or below, 25 per cent between Rs. 85,000 and Rs. 1.25 lakh and another 25 per cent between Rs.1.25 lakh and Rs.1.50 lakh.

At a crucial meeting of the committee constituted for studying resource mobilisation avenues with the Chief Minister N. Chandrababu Naidu recently, these steps were believed to have come in for a thorough discussion. One of the options looked at the process of securitisation of surplus cash flows of APBCL was floating a special purpose vehicle (SPV), the idea being the government could draw funds from this entity and assign or escrow its future receivables.

Under ARC each bank with the identified and approved farmer accounts and amounts will approach an ARC for selling the loans.

The ARC in turn would issue Security Receipts (SRs) for the balance amount to the respective banker along with 15 per cent upfront payment to the banks.

Banks may extend waiver in a week or two