April 7, 2006

Indian bank urges reprieve for poultry industry

To aid the poultry industry, the Reserve Bank of India (RBI) has asked banks to convert principal and interest due on working capital loans to term loans.

These converted loans may be recovered in instalments based on projected future earnings over a period up to three years with an initial moratorium of up to one year, according to the RBI. 

The balance of the term loan may be rescheduled with a moratorium period up to one year depending upon the cash-flow of the unit. This rescheduling is to be completed by the end of June.

The rescheduled and converted loans are to be treated as current dues with the borrower eligible for fresh need-based finance, the RBI said in a notification.

These relief measures would be extended to the whole poultry industry.

The Government has proposed to grant a one-time interest subvention of 4 percent on the outstanding principal amount as of Mar 31, 2006.