Washington: A day after West Bengal Chief Minister Mamata Banerjee sent an ultimatum to the Centre seeking a moratorium on repayment of loan by her state, Finance Minister Pranab Mukherjee on Sunday said a committee has been asked to look into the demand.

"I understand that the report which I have got, she (Mamata Banerjee) is going to meet the Prime Minister on (May) 4th. After she meets the Prime Minister, what is her scheme of things would be known. Then we would have to see. But, already I have instructed the committee under the chairmanship of Secretary Expenditure to look into it and make necessary recommendations," Mukherjee told reporters at a news conference here.

The remarks came after Banerjee issued a 15-day ultimatum to the UPA government to accept her demand for a three-year moratorium on the huge interest burden of the state on loans and warned that her patience was "running out".

Mukherjee was addressing a press conference at the end of his Washington visit to attend the annual spring meeting of the International Monetary Fund (IMF) and the World Bank
The Finance Minister, who represents a West Bengal parliamentary seat in the Lok Sabha, said it would be difficult to make any further comment on the issue right now.

"It is difficult to say right now, but during the reply to the general debate in Parliament, I had mentioned that there are certain debt-stressed states, which have been identified by the 13th finance commission – Kerala, Punjab and West Bengal. I have appointed a committee under the chairmanship of Secretary Expenditure to make recommendations on how these issues could be tackled," he said.

Mukherjee said the larger issue of loan adjustment is normally dealt by the Finance Commission in the Indian system.

"As I understand West Bengal Chief Minister is demanding that there should be a moratorium for the interest payment of their outstanding loan (which) is more than Rs 200,000 crore.

So how to address those issues --- interest payment is roughly around Rs 23,000 crores per year, have a declaration on the moratorium for three to four years and also to adjust that," he said.

Banerjee had said yesterday that any effort to deprive her state would not be tolerated and would become 'a big issue' as she pointed out that she had already made repeated appeals to the Centre on the matter.

"It will have to be done. We are unable to pay. I have waited for one year and I will wait for another 15 days and then....," the Centre's crucial ally had said.