FM asks banks to submit report on sugar package in 10 days

The finance minister, P Chidambaram, while meeting the heads of state-run banks in New Delhi on Tuesday, has asked the public sector banks to implement sugar package within 10 days and submit a report before the government. The Indian Banks' Association (IBA), the trade body of bankers, is going to discuss the issue at length during its forthcoming managing committee meet to be held on February 15 in Mumbai. More interestingly, the State Bank of India and few other state-run banks have already issued letters through their circles and regions to comply the government's instruction in this direction. As part of the sugar package that has been announced by the government, full interest subvention would be provided to all scheduled commercial banks, regional rural banks and cooperative banks for the total duration of the loan (four years including two years moratorium). The interest subvention would be limited to 12% per annum of which 5% would be met out of general budget provisions of the Centre and the remaining 7% from the Sugar Development Fund.