Banks are advised to extend benefit of Interest Subvention (IS) of 2% and Prompt Repayment Incentive (PRI) of 3% for short term crop loans upto ₹3 lakh to farmers whose accounts have become due or shall become due between March 1, 2020 and May 31, 2020.
Reserve Bank of India
April 21, 2020
The Chairman/Managing Director & CEOs
All Public & Private Sector Scheduled Commercial Banks
Please refer to our circular FIDD.CO.FSD.BC.No.15/05.02.001/2018-19 dated March 7, 2019 regarding Interest Subvention Scheme for Short Term Crop Loans during the years 2018-19 and 2019-20.
2. In the wake of the nationwide lockdown due to outbreak of Covid -19 pandemic and the resultant restrictions imposed on movement of people, many farmers are not able to travel to bank branches for payment of their short term crop loan dues. As per RBI circular dated March 27, 2020 regarding Covid 19-Regulatory Package, moratorium has been granted for three months on payment of installments falling due between March 1, 2020 and May 31, 2020 in respect of all term loans including short term crop loans.
3. Accordingly, to ensure that farmers do not have to pay penal interest and at the same time continue getting the benefits of interest subvention scheme, Government has decided to continue the availability of 2% IS and 3% PRI to farmers for the extended period of repayment upto 31.05.2020 or date of repayment, whichever is earlier, for short term crop loans upto ₹3 lakh per farmer which have become due between March 01, 2020 and May 31, 2020.
4. Banks are therefore advised to extend the benefit of IS of 2% and PRI of 3% for short term crop loans upto ₹3 lakh to farmers whose accounts have become due or shall become due between March 1, 2020 and May 31, 2020.
5. All other terms and conditions remained unchanged.
(Sonali Sen Gupta)
Chief General Manager