Ref.No.NB.DoR-Policy/ 524 /IS-1/2018-19
Circular No. 99 / DoR- 32 /2018
14 May 2018
The Managing Director
Continuation of Interest Subvention Scheme for Short Term Crop Loans on interim basis during the year 2018-19- regarding
Please refer to our Circular No. 190 with Ref.No. NB.DoR-Policy/1773/IS-1/2017-18 dated 31 July 2017 on the subject- ‘Continuation of interest subvention scheme for short term crop loans during the year 2017-18 regarding’ detailing interest subvention scheme for the year 2017-18. Based upon instructions of MoA&FW, GoI vide their letter No.F.No.1-10/2018-Credit-I dated 04 May 2018, we advise that as an interim measure, it has been decided to implement the Interest Subvention Scheme on the terms and conditions approved for the scheme for 2017-18 until further instructions. Accordingly, you are advised as follows:-
i. Interest Subvention of 2% p.a. to Cooperative Banks on their own funds used for short term crop loans upto Rs.3.00 lakhs per farmer will be available provided the lending institutions make available short term credit at the ground level @ 7% p.a. to farmers. 2% Interest subvention will be calculated on the crop 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.
ii. An additional interest subvention @ 3% will be available to the 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 the Bank for repayment of crop 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 crop loans @ 4% p.a. during the year 2018-19. This benefit would not accrue to those farmers who repay after one year of availing such loans.
iii. NABARD will provide concessional refinance to StCBs at interest rates of 4.5% p.a. provided these lending institutions lend such loans upto Rs. 3.00 lakh @ 7% p.a. to the farmers.
iv. 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 the 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.
v. 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.
vi. To furnish the category-wise data of beneficiaries under the scheme as advised in our circular No. 11 with reference No. NB.DoR-Policy/3127/IS-1/2017-18 dated 16.01.2018.
2. Further it is informed that ISS is being put on DBT mode on “In kind”/services basis and all loans processed during 2018-19 are required to be brought on ISS portal/DBT platform, once it is launched. However past claims will continue to be processed manually as is being done currently.
(G. R. Chintala)
Chief General Manager