Reserve Bank of India (RBI) on 16 August 2017 said that farmers need to mandatory link Aadhaar numbers to their accounts to avail subsidised farm loan. In line with the government’s policy, the RBI on Wednesday said farmers can avail of short-term crop loans of up to Rs 3 lakh at subsidised interest rate of 7% that could go down to 4% on prompt repayment.
The RBI has also announced an interest subvention (subsidy by government) of 2% for the first year on loans that have been restructured following natural calamities. “To ensure hassle-free benefits to farmers under the Interest Subvention Scheme, the banks are advised to make Aadhaar linkage mandatory for availing of short-term crop loans in 2017-18,” the RBI said. Banks have been asked to include land details, even after providing gold as a security, for the loan to avoid multiple loaning and to ensure that only genuine farmers avail of concessional crop loans through the mechanism of gold loans.
Extension of the interest subvention scheme for farm loans was approved by the government in June. Under the interest subvention scheme 2% interest subvention will be calculated on the crop loan amount from the date of its disbursement up to the date of actual repayment by the farmer or up to the due date of the loan fixed by the banks, whichever is earlier, subject to a maximum of one year. In addition to the 2% subsidy, an additional interest subvention of 3% will be available to those who pay their dues on time.
To discourage distress sale and encourage farmers to store produce in warehouses, it said the benefit of subvention will be available to small and marginal farmers with kisan credit cards for a further period of up to 6 months post-harvest at the same rate as available to crop loans against negotiable warehouse receipts.