Farm loan latest news! Incentives extended to farmers for crop loans

The Reserve Bank of India (RBI) has issued an advisory asking banks to extend the benefit of interest subvention (IS) of 2 percent and Prompt Repayment Incentive (PRI) of 3 per cent for short term crop loans upto  Rs 3 lakh to farmers whose accounts have become due or shall become due between March 1, 2020 and May 31, 2020.

The advisory on extension of interest subvention and Prompt Repayment Incentive schemes for short term crop loans availed during the financial years 2018-19 and 2019-20 came amid the ongoing Covid-19 pandemic.

"In the wake of the nationwide lockdown due to outbreak of Covid -19 pandemic and the resultant restrictions imposed on movement of people, many farmers are not able to travel to bank branches for payment of their short term crop loan dues. As per RBI circular dated March 27, 2020 regarding Covid 19-Regulatory Package, moratorium has been granted for three months on payment of installments falling due between March 1, 2020 and May 31, 2020 in respect of all term loans including short term crop loans," an RBI release said.

To ensure that farmers do not have to pay penal interest and at the same time continue getting the benefits of interest subvention scheme, government has decided to continue the availability of 2 per cent IS and 3 per cent PRI to farmers for the extended period of repayment upto 31.05.2020 or date of repayment, whichever is earlier, for short term crop loans upto Rs 3 lakh per farmer which have become due between 1 March 1, 2020 and 31 May, 2020.

The remaining terms and conditions remain same, the release said.

See Zee Business Live TV Streaming Below:

#mute

The scheme is available to farmers who have Kisan Credit Cards (KCC). KCC was launched by the Government of India in 1998 to help farmers have access to institutionalised credit.