Cabinet approval to waive off unpaid loans obtained by paddy farmers from state banks

The Cabinet of Ministers has approved a proposal to waive off unpaid loans obtained from state banks by paddy farmers who have less than two hectares.

Prime Minister Ranil Wickremesinghe as the Minister of Finance has submitted the relevant proposal to the Cabinet.

Accordingly, the cabinet has given approval to waive off the initial loan amount which have been obtained from state banks for paddy cultivation on lands of two hectares or less and which farmers are facing difficulties in paying back.

The Easter Sunday attacks and the coronavirus pandemic that followed have had direct and indirect effects on every field in general, the government said.

It has come to the attention of the Cabinet that under this backdrop, the situation has become unbearable for the farmers who are about 30 percent of the total population.

Also, with the resorting to organic fertilizers instead of chemical fertilizers, farmers have faced severe difficulties. Due to this, the banks have categorized the unpaid loans taken by the farmers as non-performing loans.

Accordingly, the government has taken this decision in consideration of the difficulty faced by farmers in obtaining loans for paddy cultivation in the coming season.