RBI notifies 2% interest subsidy scheme for short-term crop loans

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#The Reserve Bank of India (RBI) has notified the norms for banks with regards to two per cent interest subvention or subsidy for short-term crop loans during 2018-19 and 2019-20.

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#RBI has notified Interest subvention of 2 per cent per annum to lending institutions so as to provide short-term crop loans up to Rs 3 lakh to farmers at an interest rate of 7 per cent.

#This interest subvention of 2 per cent will be calculated on the crop loan amount from the date of its disbursement/drawal up to the date of actual repayment of the crop 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.

#Under the scheme, an additional 2 per cent interest subvention is provided to farmers repaying loans promptly

#For such farmers, the effective rate of short-term crop loans works out to be 4 per cent per annum.

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