Indian Economy News

Govt approves interest subvention scheme for farmers

Mumbai: Farmers can now enjoy corp loans at just 4% next financial year as the government has approved implementation of interest rate subvention schemes with an extension, the Reserve Bank of India said in a notification on Thursday.

They can obtain such rate if they repay existing loans promptly.

"This also implies that the farmers paying promptly would get short term crop loans @4% per annum during the year 2015-16. This benefit would not accrue to those farmers who repay after one year of availing of such loans," RBI said.

Earlier in the budget proposals, the government had mentioned about of 2% interest subvention scheme for the year 2015-16 for short term crop loans upto Rs 3 lakhs.

Additional interest subvention @3% per annum will be available to the farmers repaying the loan promptly from the date of disbursement of the crop loans up to the actual date of repayment or up to the due date fixed by the bank for repayment of crop loan, whichever is earlier, subject to a maximum period of one year from the date of disbursement, RBI said.

The benefit of interest subvention will be available to small and marginal farmers having Kisan Credit Card for a further period of up to six months post-harvest on the same rate as available to crop loan.

"This 2% interest subvention will be calculated on the crop loan amount from the date of its disbursement/drawal up to the date of actual repayment of the crop loan by the farmer... subject to a maximum period of one year," RBI said in a notification on Thursday.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.