Banks told to release soft loans for millers to pay arrears to sugarcane farmers

Following Prime Minister Narendra Modi's direction last week to protect interests of sugarcane farmers, Centre has asked banks to expedite the release of soft loans to millers to pay cane arrears. Sources said that millers have already submitted applications for about Rs 1,400 crore to different banks and loan has been sanctioned only in a couple of cases. 

As of now, the total cane arrear is over Rs 14,000 crore Free Share Tips

In June, cabinet committee on economic affairs (CCEA) had approved the scheme to provide Rs 6,000 crore soft loans to the sugar industry. It had decided to provide one year moratorium on this loan and to bear Rs 600 crore interest subvention. 

"The CCEA has set the precondition that the soft loan will be provided to only those units which clear at least 50% (of dues) before June. Millers have to get these certificates from the cane commissioners in states. Most of them are getting the letters and are subsequently filing them to avail the scheme. The number of applications is increasing," said a government source Commodity Trading Tips

Top officials from departments of food, financial services and representatives from millers held a review meeting to assess the progress on Tuesday. Sources said that banks have been asked to bring more clarity about providing the loan so that more millers can be encouraged to avail this government scheme Stock Market Tips 

To ensure that farmers are paid their dues expeditiously, in the present scheme, banks will obtain the list of farmers and their bank accounts from millers with details of the extent of cane dues to be paid. The amount released by banks is directly paid into the account of the farmers on behalf of the sugar mills.