Please refer to our circular No. 34/DoR-08/2019 dated 13 February 2019 communicating guidelines on provision of KCC to Animal Husbandry farmers and Fisheries for meeting their working capital requirement and our circular No. 37 and 38 dated 15.02.2019 on Modified Interest Subvention Scheme for short term crop loans during 2018-19 and 2019-20. In continuation of the same, Ministry of Agriculture and Farmers Welfare, Government of India vide letter No. 25-I(07)/2018-ADH(Coord) dated 12.o6.2o19 have conveyed guidelines on Interest Subvention Scheme on Extension of KCC facility to Fisheries and Animal Husbandry Farmers during the period 2018-19 and 2019-20. The
salient features of which are as under:
1) Interest Subvention scheme for short term loans during the year 2018-19 and 2019-20
(i) In order to provide short term loans upto Rs. 2 lakh to farmers involved in activities related to Animal Husbandry and Fisheries, through a separate KCC for these activities, apart from the existing KCC for crop loan, at a concessional interest rate of 7 per cent per annum during the years 2018-19 and 2019-20, Government of India will provide interest subvention of 2 per cent per annum to Regional Rural Banks (RRBs) and Cooperative Banks on use of their own resources (excluding NABARD’s refinance at concessional rates). This interest subvention of 2 per cent will be calculated on the loan amount from the date of its disbursement/drawal upto the date of actual repayment of the loan by the farmer or upto the due date of the loans fixed by the Banks/RRBs/Cooperatives, whichever is earlier, subject to a maximum period of one year. In case of farmers possessing KCC for raising crops and involved in activities related to Animal Husbandry and / or Fisheries, the Interest Subvention on Short Term loan (i.e. crop loan + working capital loan for Animal Husbandry and Fisheries) will be available only on an overall limit of Rs 3 lakh per annum and subject to a maximum limit of Rs 2 lakh per farmer involved in activities only related to Animal Husbandry and / or Fisheries.
(ii) The banks may submit their claims on half yearly basis (as on 30 September 2018/2019 and 31 March 2019/2020) or on annual basis (Annexure-I). In case of half yearly claims, first half year claim can be submitted without Audit Certificate and the second half year ending 31st March 2019/2020 needs to be accompanied by a Statutory Auditor's certificate certifying the claims for subvention for the entire year ended 31 March 2019/2020, as true and correct. Any remaining claim pertaining to the disbursements made during the year 2018-19/2019-20 and not included in the claim for 31 March 2019/2020, may be consolidated separately and marked as an "Additional Claim - 2018-19/2019-20” (Annexure -IA) and may be submitted latest by 30 April 2020/2021 duly audited by Statutory Auditors certifying the correctness.
2) Prompt paying farmers - 3% interest subvention as an incentive to farmers by Government of India
(i) Government of India will also provide an additional interest subvention of 3% per annum to such of those farmers repaying on time i.e. from the date of disbursement of the working capital loan upto the actual date of repayment of farmers or upto the due date fixed by the banks for repayment of loan, whichever is earlier, subject to a maximum period of one year from the date of disbursement. This also implies that the farmers paying promptly would get short term loans @ 4% per annum during the years 2018-19 and 2019-20 on an overall limit (crop loan + working capital loan for Animal Husbandry and Fisheries) of Rs 3 lakh per annum and subject to a maximum limit of Rs 2 lakh per farmer involved in activities only related to Animal Husbandry and / or Fisheries. This benefit would accrue to only those farmers who repay both crop loan and short term loans for Animal Husbandry / Fisheries activities in time.
(ii) In order to enable the Government of India to provide 3% interest subvention to farmers for prompt repayment, the banks should first credit the eligible amount of 3% interest subvention to the farmer's account and thereafter seek reimbursement. The banks may submit their claims on a half yearly basis (as on 30th September 2018/2019 and 31st March 2019/2020) or on annual basis (Annexure-II).
(iii) Any remaining claim pertaining to 3% interest subvention provided for prompt repayment in respect of disbursement made during the year 2018-19/2019-20 and due during 2019-20/2020-21 may be submitted as "Additional Claim 2018-19/2019-20 - Incentive" latest by 30 April 2020/2021 duly audited by Statutory Auditors certifying the correctness. The format (Annexure-II) for the purpose is enclosed.
3) The guidelines for ensuring end use of working capital loan for Animal Husbandry and Fisheries activities will be on similar lines as communicated for crop loans vide our circular No.175/DoR- 47 / 2015-16 dated 20 August 2015 and may be scrupulously adhered to while preparing interest subvention claims (copy enclosed for ready reference).
4) Interest Subvention would be available only on credit requirement for working capital for Animal Husbandry and Fisheries under ST limit of KCC. Limit towards household / consumption requirement / maintenance expenses of farm assets, term loan etc. will be outside the purview of the Interest Subvention Scheme.
5) The interest subvention claims, duly audited by the Statutory Auditors about their correctness, may be submitted by the bank to the Chief General Manager / OIC of our respective Regional Offices within a quarter from the close of the half year / year.
6) In order to curtail time lags for submission of claims, if delayed due to non- availability of Statutory Auditor, the banks may forward the claims with certification from Chartered Accountant, explicitly giving reasons for non- submission of Statutory Auditor’s Certificate.
7) To ensure hassle free benefits to farmers under the Scheme, the lending institutions may make Aadhar linkage mandatory for availing short term loans during 2018-19 and 2019-20.
8) Further, as advised by Government of India, the ISS is being put on DBT mode on “In kind”/services basis and all short term loans processed in 2018-19 onwards are required to be brought on ISS portal / DBT platform, once it is launched.
9) Accordingly, banks are advised to capture the category wise data of beneficiaries under the Scheme and report the same on ISS portal individual farmer wise to settle the claims arising from 2018-19 onwards. Till such time the DBT portal becomes functional banks are requested to submit their claims, category-wise in manual form. Bank may also submit the duly filled category-wise data in Annexure-III(A) and III(B) along with the claim.
10) Banks may ensure wide publicity for the scheme through their lending branches so that the farmers can avail the benefits of prompt repayment under the scheme and also keep NABARD RO informed of the steps initiated by them in this regard.
Banks are hereby advised to strictly follow the timelines prescribed for submission of claims.