Haryana Government waives Rs 4,750 cr of interest, penalty on crop loans :

The Haryana Government has announced a waiver of Rs. 4750 crore on interest and penalty on crop loans. Chief Minister of Haryana Manohar Lal Khattar announced that this waiver will benefit about 10 Lakh farmers of the Haryana.

The benefit of this announcement will benefit those farmers who have borrowed from District Cooperative Central Banks, Primary Agriculture Cooperative Societies (PACS), Development Bank and Land Mortgage Bank of Haryana.

Key Highlights :

1. As per the announcement by CM Manohar Lal Khattar, the farmers whose bank accounts were declared Non-Performing Assets (NPAs) by these banks and were unable to renew their loans will now be able to do so. 

2. Out of 13 lakh farmers who borrowed from Primary Agriculture Cooperative Societies, the accounts of over eight lakh had turned into NPAs. 

3. The five per cent penalty imposed on farmers who failed to repay loans taken from PACS will now be completely waived.

4. About 85,000 farmers had taken loans worth 3,000 crore rupees from the District Cooperative Central Banks DCCB). Out of which, accounts of 32,000 farmers involving an amount of 800 crore rupees have turned NPAs. 

5. Farmers will have to pay two per cent interest for loans less than five lakh rupees, five per cent for loans between 5 lakh to 10 lakh rupees and 10 per cent for bigger loans.

NPA of 800 crore :

Haryana CM Manohar Lal Khattar also announced that a benefit of Rs. 1,800 crore will be given to borrowers of DCCB if they pay the principal amount along with simple interest by November 30. Around 85,000 farmers had taken loans worth Rs. 3,000 crore from DCCB. Out of which, accounts of 32,000 farmers involving an amount of Rs. 800 crore have turned NPA.

About Non-Performing Asset (NPA) :

A nonperforming asset (NPA) refers to a classification for loans or advances that are in default or are in arrears on scheduled payments of principal or interest. In most cases, debt is classified as nonperforming when loan payments have not been made for a period of 90 days. While 90 days of nonpayment is the standard, the amount of elapsed time may be shorter or longer depending on the terms and conditions of each loan.

Nonperforming assets are typically listed on the balance sheets of banks. Banks usually categorize loans as nonperforming after 90 days of nonpayment of interest or principal, which can occur during the term of the loan or at maturity. For example, if a company with a $10 million loan with interest-only payments of $50,000 per month fails to make a payment for three consecutive months, the lender may be required to categorize the loan as nonperforming to meet regulatory requirements. A loan can also be categorized as nonperforming if a company makes all interest payments but cannot repay the principal at maturity.