BJP MP Subramanian Swamy writes to PM Modi questioning exclusion of farmers from RBI's loan moratorium package

In a letter to Prime Minister Narendra Modi, Bharatiya Janata Party (BJP) leader Subramanian Swamy has questioned the exclusion of loans to farmers and other vulnerable sections from the Reserve Bank of India's moratorium package. He has urged the prime minister to instruct the Finance Ministry and the Reserve Bank of India (RBI) to include farm and agricultural loans in the moratorium package.

The BJP Member of Parliament (MP) in his letter remarks that the RBI thinks farmers are not affected by the COVID-19-related stress. He also pointed out another 'anomaly', saying, "A farmer taking a housing loan or a personal loan can be re-phrased/restructured, but not his tractor loan or mainly crop loans. "

He said this in reference to the central bank's resolution framework for COVID-19-related stress, dated August 6.

Farm credit and "loans to Primary Agricultural Credit Societies (PACS), Farmers' Service Societies (FSS) and Large-sized Adivasi Multi-Purpose Societies (LAMPS) for on-lending to agriculture" are not eligible for a resolution plan under the RBI's framework.

In light of the economic disruption due to the pandemic, the RBI had directed banks to grant moratorium on payment of interest dues for a period of three months till May, which was later extended until August 31. Several borrowers had approached the Supreme Court (SC) seeking a waiver on payment of interest dues levied during the six-month moratorium period.

Last week, in what came as a relief to hundreds of borrowers, the apex court ordered that accounts that had not been declared non-performing assets (NPAs) until August 31 will not be tagged as bad loans until further orders. The SC is due to hear the loan moratorium case next on September 10.