Shares of non-banking financial companies (NBFCs) rose between 2 percent – 4 percent intraday on Tuesday, 20th June 2017 on the back of developments around farm loan waivers.
Satin Creditcare, Bharat Financial Inclusion, Equitas Holdings, Mahindra and Mahindra Financial Services as well as Bajaj Finance all reacted positively to the farm loan waiver cap of Rs 1 lakh in Maharashtra and Rs 2 lakh in Punjab. Management commentary by these firms indicates very little or no hit on their finances.
Maharashtra revenue minister Chandrakant Patil announced a waiver of farm loans amounting to Rs 1 lakh which turned outstanding last year on June 30. The reasons for outstanding loans should fall under these three heads – drought, crop failure, and debt-ridden farmers who were unable to repay the loans.
Meanwhile, Punjab Chief Minister Amarinder Singh on Monday announced total waiver of crop loans up to Rs 2 lakh of small and marginal farmers, and a flat Rs 2 lakh relief for all marginal farmers, irrespective of the loan amount.
The announcement has thus paved way for eventual total waiver of agricultural debts, which was a major poll promise of the Congress during the Punjab Assembly polls in March this year.
Speaking at the Assembly, the chief minister noted the move would benefit 10.25 lakh farmers, including 8.75 lakh farmers up to 5 acres.