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Interest Subvention on Loan of Farmers

Further from 2009-10 to incentivize the prompt payee farmers, the GoI also introduced a provision of Prompt Repayment Incentive (PRI) under the Scheme.

The Government of India (GoI) has been implementing the Interest Subvention Scheme (ISS) since 2006-07 under which short term crop loans upto Rs. 3.00 lakh are made available to farmers at subvented interest rate of 7% per annum.

Further from 2009-10 to incentivize the prompt payee farmers, the GoI also introduced a provision of Prompt Repayment Incentive (PRI) under the Scheme.

Presently, under ISS, the GoI provides PRI @ 3% to the prompt payee farmers for repayment of their crop loans as per the repayment schedule fixed by the banks or within a period of one year from the date of disbursement, whichever is earlier.

A request has been received from the Government of Rajasthan for release of interest subvention by National Bank for Agriculture and Rural development (NABARD) to Rajasthan State Cooperative Bank Ltd. in the beginning of the year.

Alternatively, it has been suggested that a revolving fund for matching amount be created to enable Short Term Cooperative Credit Structure to avail timely interest subvention.

As per the current scheme provisions funds are provided by the Government to NABARD only on reimbursement basis of audited claims of concerned banks and there is no proposal under consideration to provide funds in advance.

This Information was given by the Minister of State for Ministry of Agriculture & Farmers Welfare Shri Parshottam Rupala.

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