The government has extended the benefit for loans falling due between March 1 and May 31.The government said that farmers will get the 3% concession on interest rate on crop loans even if they fail to repay loans till May 31. This is sync with Reserve Bank of India’s three-month moratorium scheme for stressed borrowers.
Farmers get a 3% concession on crop loan interest for prompt repayment. Loans up to Rs 3 lakh are considered for this benefit. This helps borrowers with good repaying habit get loans at 4% annual rate.
“In order to ensure that farmers do not have to face the situation of paying penal interest and they can continue getting the benefit of short term crop loans at a 4% interest rate, the government has decided to further to continuity the availability of 2% interest subvention to banks and 3% prompt repayment incentive to farmers,” the ministry of agriculture said in a note.
The government has extended the benefit for loans falling due between March 1 and May 31.
“Many farmers are not able to travel to bank branches for payment of their short term crop loan dues,” the ministry said, inviting attention of Reserve Bank of India and the National Bank for Agriculture and Rural Development.