Updated on June 8, 2020
In view of the extension of moratorium by another three months, i.e., up to August 31, 2020, Government has decided to continue the availability of 2% Interest Subvention and 3% Prompt repayment Incentive (PRI) to farmers for the extended period of repayment up to August 31, 2020, or date of repayment, whichever is earlier. This benefit will be applicable to all short term loans for Agriculture and Animal Husbandry, Dairy, and Fisheries (AHDF) up to ₹3 lakh per farmer (upto ₹2 lakh for AHDF(Animal Husbandry, Dairy and Fisheries (AHDF) farmers.
Reserve Bank of India vide. its circular RBI/2019-20/48 DD.CO.FSD.BC.No.10/05.02.001/2019-20 dated August 26, 2019, conveyed that the Government of India has issued the operational guidelines of the Interest Subvention Scheme for Kisan Credit Card facility to fisheries and animal husbandry farmers for a period of two years i.e. 2018-19 and 2019-20.
According to the notification, the lending institutions viz. Public Sector Banks (PSBs) and Private Sector Commercial Banks (in respect of loans given by their rural and semi-urban branches only)are eligible for 2% interest subvention on Kisan Credit Card facility extended to fisheries and animal husbandry farmers for a period of two years i.e. 2018-19 and 2019-20. However, the eligibility for interest subvention is subject to the use of own resources for the facility. Further, the Government has approved to extend the benefits of Interest Subvention at 2% and Prompt Repayment Incentive (PRI) at 3% to fisheries and animal husbandry farmers to meet their working capital needs up to ₹ 2 lakh under the KCC scheme. This also implies that the farmers repaying promptly as above would get short term loans @ 4% per annum during the years 2018-19 and 2019-20. This benefit would accrue to only those farmers who repay their both short term crop loan and working capital loan for animal husbandry/fisheries activities in time. This interest subvention of 2% will be calculated on the loan amount from the date of its disbursement / drawal up to the date of actual repayment of the loan by the farmer or up to the due date of the loan fixed by the banks, whichever is earlier, subject to a maximum period of one year.
The KCC limit for farmers involved in animal husbandry and fisheries is a separate KCC facility on a maximum limit of ₹ 2 lakh short term loan. This is apart from the existing KCC for crop loan, at a concessional interest rate of 7% per annum during the years 2018-19 and 2019-20 at a concessional interest rate of 7% per annum during the years 2018-19 and 2019-20. However, the farmers who are already having KCC (crop loan) and involved in animal husbandry & fisheries activities, can avail a sub-limit for such activities. The total limit for crop and animal husbandry/fisheries is ₹ 3 lakh per annum and subject to a maximum limit of ₹ 2 lakh per farmer involved in activities only related to animal husbandry and / or fisheries. As per the RBI notification, the limit for crop loan component will take priority for interest subvention and prompt repayment incentive benefits and the residual amount will be considered towards animal husbandry and / or fisheries subject to a cap as mentioned above.
Aadhar linkage is mandatory for the beneficiary of the Interest Subvention Scheme. Banks are advised to capture and submit the category wise data of beneficiaries under the scheme and report the same on ISS portal individual farmer wise once it is launched by the Ministry of Agriculture and Farmers Welfare to settle the claims arising from 2018-19 onwards.
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