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Providing 2% Interest Subvention (IS) to Banks and 3% Prompt Repayment Incentive (PRI) to farmers for loans due between 1st March 2020 and 31st August 2020
Providing 2% Interest Subvention (IS) to Banks and 3% Prompt Repayment Incentive (PRI) to farmers for loans due between 1st March 2020 and 31st August 2020
 
Please refer to our Circular reference No. NB.DoR.Policy /2899/ IS-1 / 2019-20 {Circular No.76/DoR-15/2020} dated 31 March 2020, conveying extension of benefit of 2% Interest Subvention (IS) to Banks and 3% Prompt Repayment Incentive (PRI) to farmers for the extended period upto 31.05.2020 or date of actual repayment whichever is earlier, in respect of short term crop loans upto Rs.3 lakh per farmer extended by Banks @7% p.a., which have become due or shall become due between 1st March 2020 and 31st May 2020.
 
2. Since the COVID -19 threat is likely to continue beyond 31.05.2020, RBI vide its notification dated 23rd May 2020 has extended the moratorium by another 3 months i.e. from 1st June 2020 to 31st August 2020 in respect of all term loans (including agricultural term loans, retail and crop loans) and working capital loans taken from all Commercial Banks (including Regional Rural Banks, Small Finance Banks and Local Area Banks) and Co-operative Banks. 
 
3. In order to ensure that farmers do not have to face the situation of paying higher interest and they can continue getting the benefit of short term loan at concessional interest rate of 4% per annum which is applicable on timely repayment, Ministry of Agriculture and Farmers Welfare, Govt. of India vide their Office Memorandum F. No. 1-9/2020- Credit-I dated 01 June 2020 {copy enclosed}, has decided to further continue the benefit of 2% Interest Subvention (IS) to Banks and 3% Prompt Repayment Incentive (PRI) to farmers for agricultural including Animal Husbandry, Dairy & Fisheries for the extended period of repayment upto 31.08.2020 or date of actual repayment, whichever is earlier, for such short term loans upto Rs.3 lakh per farmer (upto Rs.2 lakh for Animal Husbandry, Dairy & Fisheries farmers) given by Banks @7% p.a. which have become due or shall become due between 1st March 2020 and 31st August 2020.
 
4. In view of the above, we advise you to take appropriate action and continue providing the PRI benefit to farmers for the extended period of repayment of such short term loans upto 31st August, 2020 for agriculture including Animal Husbandry, Dairy & Fisheries, which have fallen due or shall fall due between from 1st March 2020 and 31st August 2020.