Loan Moratorium And Relief Measures For Farmers Affected By Natural Calamities: Finance Minister

New Delhi, Dec 16 (KNN) Finance Minister Nirmala Sitharaman on Monday informed the Lok Sabha that the government has taken several measures to provide relief to agricultural borrowers affected by natural disasters, including loan restructuring and rescheduling by commercial banks.

RBI Guidelines on Natural Calamity Relief

The Finance Minister said that the Reserve Bank of India (RBI) had issued Master Directions on October 17, 2018, outlining relief measures by banks in areas affected by natural calamities. 

These directions recognise events such as cyclones, droughts, earthquakes, floods, landslides, cloudbursts, pest attacks and cold waves as natural calamities.

Accordingly, short-term agricultural loans, except those already overdue at the time of the calamity, are eligible for restructuring once a natural calamity is officially declared by the State or Central Government. Banks are also permitted to sanction fresh loans to affected borrowers.

The agricultural term loan instalments can be rescheduled based on the borrower’s repayment capacity and the nature of the calamity. 

The restructured portion of both short-term and long-term loans may be treated as current dues and need not be classified as non-performing assets (NPAs).

Agriculture Loan Write-offs

The Finance Minister also shared data on year-wise loans written off in the agriculture and allied activities sector by scheduled commercial banks, excluding Regional Rural Banks (RRBs) and payment banks. Loan write-offs saw a decline since FY 2023-24, stood at around Rs 14,122 crore in FY 2025–26.

Coordination with Stakeholders

Sitharaman said the government, in coordination with stakeholders such as State Level Bankers’ Committees, RBI, NABARD, banks and state and central government departments, continues to make efforts to ensure that relief measures reach affected borrowers within the best possible timelines.

(KNN Bureau)