Debt Swap Scheme

(Loan to Farmers Indebted to Money Lenders)

Objectives: To provide relief and remove debt burden of identified, actually distresses farmers who are under heavy burden of debt from non-institutional source (i.e. money lenders) by providing them loan for debt redemption. This is a loan given to farmers to offset their loan from money-lenders.

Eligible Borrower: Small and marginal and agricultural labourers. All borrowers regular in payment, non borrowers and tenant farmers who approach as a Self-Help Group or Joint Liability Group are also eligible for this loan. Existing willful defaulters of the bank will not be eligible.

Loan Amount: Maximum: Rs. 50,000/-. However, actual loan amount shall be determined after proper verification/identification of beneficiaries and obtaining in writing details like name and address of money lenders, amount of debt, date of creation of debt, etc.

Other Conditions: The applicant should provide an affidavit and a letter from the money –lender confirming the loan. It should be ensured that proper money receipt/discharges are obtained as evidence of redemption of debt.

Margin: NIL

Disbursement: Disbursements will be made directly to the money-lender.

Repayment: Repayment period and periodicity shall be decided depending on the capacity and income generation of the borrower.

Moratorium Period: Maximum 1 year.

Interest Rate: Applicable as per prevailing rate and is subject to change from time to time.

Periodicity for Application of Interest: Yearly rests.

Security: Similar to that of Agricultural loan.

Processing fees: NIL

Pre-payment Charges: NIL