Interest subsidy scheme on short-term crop loans of up to Rs 3 lakh will be implemented through the DBT mode from the current financial year. The government has earmarked Rs 15,000 crore for 2018-19 towards interest subvention for short-term crop loans.
In a notification, RBI also said that the Interest Subvention Scheme (ISS) 2018-19 will be required to be settled as applicable in Plan Scheme Scheduled Caste (SC), Scheduled Tribe (ST) and North East Region (NER), among others. The agriculture and farmers welfare ministry has informed RBI that it has initiated the process for continuation of the ISS 2018-19.
As per the scheme, farmers can avail of short-term crop loans of up to Rs 3 lakh at subsidised interest rate of 7 per cent that could go down to 4 per cent on prompt repayment. The interest subvention of 2 per cent 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.
Till such time the DBT portal becomes functional banks are requested to submit their claims, category-wise Under the ISS, interest subvention is provided to NABARD, regional rural banks, cooperative banks, public sector banks as well as private banks for providing short term credit to farmers at subsidised rate of interest.