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Presently, a particular exemption is given by the Reserve Financial institution of India, which permits banks to finance fertiliser subsidy receivables for a interval of 60 days.
“This was meant to be a short-term measure. It’s being reviewed, however no last determination has been made. We’ve acquired some solutions from banks, and people are being examined,” mentioned an official conscious of the matter. Beneath the fertiliser DBT system, 100% subsidy on varied fertiliser grades is launched to fertiliser corporations primarily based on precise gross sales made by the retailers to the beneficiaries.
“The subsidy funds are processed on a weekly foundation, so there is no such thing as a backlog,” the official mentioned, including that the scheme has been in a position to weed out any irregularities as purchaser identification is completed via POS (Level-of-Gross sales) gadgets primarily based on Aadhaar authentication, voter ID, or Kisan credit score Card or KCC. The federal government earlier used to depend on particular banking preparations (SBA) to offer funds to fertiliser corporations in opposition to subsidy claims. This route was used when there was a fund scarcity that led the federal government to rearrange loans via state-run banks for making subsidy funds.
A senior financial institution govt mentioned lenders have shared their issues over the rapid discontinuation of the exemption as it might have an antagonistic influence on the liquidity of fertiliser corporations.
“At current, subsidy receivables are a significant part of their monetary parameters whereas assessing their working capital wants,” the manager mentioned, including the federal government might maintain additional talks with RBI earlier than taking a last name on the matter.
Beneath current legal guidelines, lenders face curbs on extending bridge loans in opposition to quantities receivable from central or state governments via subsidies, refunds, reimbursements, or capital contributions.
