Scale of Finance headaches in Loan Waiver!

The Scale of Finance ruled adopted by Andhra Pradesh government has started creating headaches for bankers and some of the farmers. What is this scale of finance? There is a limit set for agricultural loans per acre, this is called Scale of Finance. This limit usually varies from area to area and crop to crop.

However the bankers have gone greedy for the interests and issued loans greater than this SOF limit. These irregularities are rejected by the government in the scheme and the loan waiver is extended only up to the SOF limit.

It is also said that the RBI has warned the banks strictly against giving loans higher than the SOF limits. In order to benefit the small farmers, Andhra Pradesh government did not impose this SOF limits on loans less than 50000.