In the presence of Finance Minister Ajanta Neog and SBI‘s Assistant General Manager Binoy Kumar, the State Government and SBI (State Bank of India) signed a Memorandum of Understanding (MoU) on bank loans for PWD (Persons with Disabilities) government employees on Friday.
PwD staff can get bank loans up to Rs 10 lakh to buy two-wheelers and four-wheelers, according to the MoU. The state government will provide 4% of the total loan amount as a subsidy.
Other MoU signed by Assam Government
The Assam government inked an agreement with 38 microfinance institutions and banks to execute the Assam Micro Finance Incentive and Relief Scheme (AMFIRS) in 2021.
The Assam government signed an MoU with 38 microfinance institutions and banks on August 25 to compensate and waive microfinance debts made by economically vulnerable women in the state.
The Memorandum of Understanding for the implementation of the Assam Micro Finance Incentive and Relief Scheme (AMFIRS) in 2021 has been signed. The Memorandum of Understanding will be in effect until March 31, 2023.
Supporting economic activities of poor households
The state government formed a committee under the chairmanship of Housing and Urban Affairs Minister Ashok Singhal to fulfill its election promise of waiving micro-finance loans to provide support to women who are unable to repay the loan amount, Assam Chief Minister Dr. Himanta Biswa Sarma said in his first cabinet meeting.
“Accordingly, Assam Micro Finance Incentive and Relief Scheme have been devised to balance long term view of ensuring continuity of micro-finance for supporting economic activities of low income and poor households in the state and providing relief to eligible customers for tiding over current stress in the micro-finance sector due to various operational reasons,” CM Himanta Biswa Sarma said.
According to Himanta Biswa Sarma, the state had 14 lakh microfinance borrowers as of June 2021. He said the new scheme would involve a credit portfolio of around Rs 12,000 crore, with the state government expected to spend roughly Rs 7,200 crore.
The initiative, according to CM Himanta Biswa Sarma, emphasizes responsible lending by financial institutions through strict adherence to RBI regulations and industry guidelines, as well as promoting responsible borrowing and timely repayment among customers.
Provision of the MoU
According to Himanta Biswa Sarma, all borrowers will be eligible for relief under the plan if they have loans from up to three lenders and a total loan amount of up to Rs 1.25 lakh.
Borrowers who have been repaying on time with zero days past due would be given a one-time bonus up to the amount of their outstanding debt, subject to a ceiling of Rs 25,000, under the scheme.
Similarly, the state government will compensate borrowers whose payments are past due. All of these borrowers will be urged to make timely installment payments to keep their accounts in good standing and to support credit culture.
To encourage such credit discipline, the government will offer a one-time incentive payment of Rs 25,000 or equivalent to the outstanding sum, whichever is lower, after observing such borrowers for a length of time.
Borrowers who are stressed, destitute, or whose accounts have become non-performing assets (NPAs) will also need to apply using a format that has been reviewed and certified by the lender. Based on a thorough analysis, the government will consider offering partial or full relief.
Many individuals in the state, according to CM Himanta Biswa Sarma, are stressed by private money lenders. “Keeping this in view, the state government decided to promote borrowing through MFI and Banks only that carry out their operations strictly adhering to RBI guidelines,” he said.
In the future, CM Himanta Biswa Sarma has encouraged MFIs and banks to follow the RBI’s fair practice code when disbursing loans.