Faced with liquidity crunch the state-owned banks on Wednesday urged the government to pay interest for delay in reimbursing the Rs 70,000 crore worth farm loans written off by them.
The Chairpersons of Regional Rural Banks (RRBs) during their meeting with the Finance Minister P Chidambaram suggested that since they were yet to get the reimbursement of the farmers’ loans,  they should get the interest for the delayed period.  The Chiefs of the RRBs  urged the Government to compensate banks by providing interest on the loans waived off, as they had to pay interest to their lenders for that period.
In response Mr Chidambaram said due to delay in Parliament session, Supplementary Demand for Grants could not be passed.
  He told the bankers that the proposed Supplementary Demand for Grants would have made provisions for reimbursement to banks. Since this  could not be done because of delay in Parliament Session the RBI and Nabard had been asked to look into the matter.