Ref.No. NB.DoR-Policy/ 910 /IS-1/ 2022-23
Circular No. 204 /Refinance- 70 /2022
08 September 2022
All Regional Rural Banks
Continuation of Modified Interest Subvention Scheme for Short Term Loans on interim basis during the year 2022-23 and 2023-24
Please refer to (i) our Circular No. 49 (Ref.No. NB.DoR-Policy/ 1691 /IS-1/ 2021-22) dated 29th March 2022, and (ii) our Circular No. 77 (Ref.No. NB.DoR-Policy/ 52 /IS-1/ 2021-22) dated 11 April 2022 on the Modified Interest Subvention Scheme for short term crop loans during 2021-22 and 2022-23.
2. MoA&FW, GoI has now vide their letter No.F.No.1-4/2020-Credit-I dated 25th August 2022 advised that it has been decided to implement, until further instructions, the Interest Subvention Scheme for providing short term loans for agriculture and allied activities, with modifications, availed through KCC for FY 2022-23 and 2023-24. Accordingly, you are advised as under:-
a. Interest Subvention of 1.5% p.a. will be available to Regional Rural Banks, on their own funds used for short term loans (crop loans and WC loans for animal husbandry, fisheries, dairy, bee keeping etc.) upto Rs.3.00 lakhs per farmer (subject to maximum of Rs 2.00 lakh per farmer for WC loans for AH&F, Dairy, beekeeping etc.) will be available provided the lending institutions make available short term credit to farmers @ 7% p.a. Interest subvention @1.5% will be calculated on the crop loans/WC loans amount from the date of its disbursement/drawal upto the date of actual repayment of the crop loans/ WC loans by the farmer or upto the due date of the loan fixed by the Banks, whichever is earlier, subject to a maximum period of one year. 1.5% Interest Subvention will be continued till FY 2023-24.
||Lending rate to the farmers
||Rate for Interest Subvention
b. An additional interest subvention @ 3% will be available to such of those farmers repaying on time i.e., from the date of disbursement of the short term loan up to the actual date of repayment by farmers or up to the due date fixed by the Bank for repayment of crop loans/WC loans, whichever is earlier, subject to a maximum period of one year from the date of disbursement. This subvention will be available to such farmers on the short term production credit up to a maximum amount of Rs.3 lakh and on WC for AH&F, bee keeping, dairy etc. up to a maximum amount of Rs.2 lakh. This also implies that the farmers, paying promptly, would get short term loans @ 4% p.a. during the year 2022-23 and 2023-24. This benefit would not accrue to those farmers who repay after one year of availing crop loans/ WC loans. The additional interest subvention @ 3% will be continued in both FY 2022-23 and FY 2023-24.
c. In order to discourage distress sale by farmers and to encourage them to store their produce in warehouses, the benefit of Interest Subvention will be available to small and marginal farmers having Kisan Credit Card for a further period of upto six months post-harvest of the crop on the produce stored in warehouses accredited with Warehousing Development Regulatory Authority (WDRA) against negotiable warehouse receipts, at the same rate as is available on crop loans/ WC loans.
d. To provide relief to farmers affected by natural calamities, the applicable rate of interest subvention for that year will be made available to Banks for the first year on the restructured loan amount. Such restructured loans will attract normal rate of interest from the second year onwards as per the extant policy laid down by the RBI.
e. However, to provide relief to farmers affected by severe natural calamities, an Interest subvention of that particular year will be available to Banks for the first three years/entire period (subject to maximum period of 5 years) on the restructured loan amount. Further, in all such cases, the benefit of prompt repayment incentive @ 3% per annum shall also be provided to the affected farmers. The grant of such benefit in cases of severe natural calamities shall, however, be decided by a High-Level Committee (HLC) based on the recommendation of Inter-Ministerial Central Team (IMCT) and Sub Committee of National Executive Committee (SC-NEC)
3. Further, in terms of our circular No.62 dated 13.03.2020 KCC has been made mandatory for availing the benefit of Interest Subvention on short term loans disbursed from 01.04.2020.
4. Banks are advised to mandatorily maintain and furnish, as and when required, the category-wise data of beneficiaries under the scheme as the same has to be reported on ISS portal, individual farmer wise to settle audited claims from FY 2022-23 onwards. Further, the audited claims up to scheme year 2020-21 are to be furnished latest by 30th September 2022 to the GOI.
5. Aadhaar linkage has been made mandatory for availing benefit under ISS of GoI. Hence the data regarding the same may be maintained by the Bank. The claims may be invariably accompanied by a certificate stating that all claims are adhaar linked.
6. All RRBs are requested to send a copy of instructions/ circulars related to Short Term Loan for Agriculture and Allied activities/KCC and MISS (whenever they issue any) to Joint Secretary (Credit), Department of Agriculture & Farmers Welfare, Krishi Bhawan, New Delhi-110001.
(Vivek Krishna Sinha)
Chief General Manager