1. Please refer to (i) our Circular No. 38 (Ref.No. NB.DoR-Policy/ 2967 /IS-1/ 2018-19) dated 15 February 2019 on the Modified Interest Subvention Scheme for short term crop loans during 2018-19 and 2019-20’ and (ii) Our circular No. 198 (Ref.No. NB.DOR-Policy/933/IS AHF-I/2019-20) dated 24 June 2019 on Extension of Interest subvention facility to Fisheries and Animal Husbandry KCC Farmers for the period 2019-20.
2. MoA&FW, GoI has since vide their letter No.F.No.1-4/2020-Credit-I dated 28 May 2020 advised that as an interim measure, it has been decided to implement, until further instructions, the Interest Subvention Scheme for Short Term Loans for agriculture and allied activities on the terms and conditions as approved for the scheme in the years 2018-19 and 2019-20. Accordingly, you are advised as under:-
a. Interest Subvention of 2% p.a. to Cooperative Banks, on their own funds used for short term loans (crop loans and WC loans for animal husbandry and fisheries activities) upto Rs.3.00 lakhs per farmer (subject to maximum of Rs 2.00 lakh per farmer for WC loan for AH&F activities) will be available provided the lending institutions make available short term credit to farmers @ 7% p.a. Interest subvention @2% will be calculated on the crop loan/WC loan amount from the date of its disbursement/drawal upto the date of actual repayment of the crop loan 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.
b. An additional interest subvention @ 3% will be available to the prompt payee farmers from the date of disbursement of the short term loan upto the actual date of repayment by farmers or upto the due date fixed by the Bank for repayment of crop loan/WC loan, whichever is earlier, subject to a maximum period of one year from the date of disbursement. This also implies that the prompt payee farmers would get short term loans @ 4% p.a. during the year 2020-21. This benefit would not accrue to those farmers who repay after one year of availing such loans.
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 loan.
d. To provide relief to farmers affected by natural calamities, an interest subvention of 2% per annum will be made available to Banks for the first year on the restructured loan amount. Such restructured loans may attract normal rate of interest from the second year onwards as per the policy laid down by the RBI.
e. However, to provide relief to farmers affected by severe calamities, Interest subvention of 2% 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 cases of severe 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.
5. Aadhaar has been made mandatory for availing benefit under ISS of GoI. Hence the data regarding the same may be maintained by the Bank.