Monday, October 5, 2015

Interest Subvention Scheme

Government has approved the implementation of the Interest Subvention Scheme for the year 2015-16 for short term crop loans upto Rs 3.00 lakhs with the following stipulations.

2% per annum will be made available to Banks on short-term crop loans up to Rs.3,00,000/- per farmer for credit granted at 7% per annum to the farmers. It will be calculated from the date of disbursement/drawal up to the date of repayment or up to the due date of the loan whichever is earlier, subject to a maximum period of one year.
Additional subvention @3% per annum will be available to the farmers repaying the loan promptly as mentioned in (i) above. 
The benefit of interest subvention will be available to small and marginal farmers having Kisan Credit Card for a further period of six months post-harvest on the same rate against negotiable warehouse receipt .
To provide relief to farmers affected by natural calamities, the interest subvention of 2% will be available to banks for the first year on the restructured amount. Such restructured loans may attract normal rate of interest from the second year onwards.
Claims may be submitted to the CGM, Financial Inclusion and Development Department, RBI, Mumbai.
In respect of 2% interest subvention, banks are required to submit their claims on a half-yearly basis. Any remaining claim not included in the claim for March 31, 2016, may be consolidated separately and marked as an 'Additional Claim' duly audited by the Statutory Auditors.
In respect of the 3% additional subvention, banks may submit their one-time consolidated claims latest by April 30, 2017, duly audited.

Based on RBI Circular dt 13/08/15. Please visit www.rbi.org.in for any further clarification if required…..          Poppy