This will help help farmers to repay such loans upto the extended period at an annual interest of 4 per cent without attracting any penalty. New Delhi: The has decided to extend the benefit of 2 per cent interest subvention (IS) to banks and 3 per cent prompt repayment incentive (PRI) to all farmers up to 31st May, 2020 for all crop loans up to Rs 3 lakh given by banks which have become due or are becoming due between 1st March, 2020 and May 31, 2020.
This will help help farmers to repay such loans up to the extended period at an annual interest of 4 per cent without attracting any penalty.
“Due to ongoing lockdown, there have been 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,” said an agriculture ministry official, “Moreover, due to restrictions on movement of people and difficulty in timely sale and receipt of payment of their produce, farmers may be facing difficulties in repayment of their short term crop loans falling due during this period.
The government provides concessional crops loans to farmers through banks with 2 per cent per annum interest subvention to banks and 3 per cent additional benefit on timely repayment to farmers thus providing loans up to Rs 3 lakh at 4 per cent per annum interest on timely repayment.
“The government has given crop loans of Rs 15 lakh crore is year out of which short term loan was worth Rs 8 lakh crore. A farmer is eligible for interest subvention only when he repays the loan. So the time extension will help farmers pay back the loan and become eligible for loans in next financial year,” the official said.