Govt gives additional grace period of 60 days to farmers to pay crop loan

The Reserve Bank of India on Monday said that the government has decided to provide an additional grace period of 60 days for prompt repayment incentive of 3% to those farmers whose crop loan dues are falling due between November 1, 2016 and December 31, 2016.

The decision was taken considering the constraints faced by farmers for timely repayment of loan dues on account of withdrawal of high denomination currency on November 8.

GoI has been implementing the Interest Subvention Scheme (the Scheme) since 2006-07. 

"In terms of the extant Scheme for the year 2016-17 besides subvention of 2% per annum, an additional interest subvention of 3% is also provided to prompt payee farmers from the date of disbursement of the crop loan upto the actual date of repayment by farmers or upto the due date fixed by banks for repayment of crop loans whichever is earlier subject to a maximum period of one year from the date of disbursement," RBI said.

This benefit does not accrue to those farmers who repay after one year of availing such loans.

Currently, the government provides crop loans at a subvented interest rate of 7% per annum.

"Banks may consider the above while submitting their one-time consolidated 3% additional subvention claims pertaining to the disbursements made during the entire year 2016-17," RBI said.