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RBI modifies norms for banks on short-term crop loan scheme via Kisan Credit Card

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RBI modifies norms for banks on short-term crop loan scheme via Kisan Credit Card

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In order to provide short-term crop loans up to Rs 3 lakh to farmers at an interest rate of 7% per annum, the government offers interest subvention of 2% annually to banks. An additional 3% interest subvention is provided to farmers who pay their loans promptly. For such farmers, the effective interest rate is 4%.

RBI modifies norms for banks on short-term crop loan scheme via Kisan Credit Card

The Reserve Bank of India (RBI) on Thursday modified norms for banks to claim the amount of interest subvention provided to farmers under the short-term crop loan scheme through Kisan Credit Card (KCC) during the last fiscal. Pending claims for the 2021-22 financial year can be submitted by June 30, 2023 and those have to be duly certified by the statutory auditors "as true and correct," RBI said in a circular.

In order to provide short-term crop loans up to Rs 3 lakh to farmers at an interest rate of 7 percent per annum, the government offers interest subvention of 2 percent annually to banks. An additional 3 percent interest subvention is provided to farmers who pay their loans promptly. For such farmers, the effective interest rate is 4 percent.

As per the circular on 'Modified Interest Subvention Scheme for Short Term Loans for Agriculture and Allied Activities availed through Kisan Credit Card (KCC)' during 2021-22, banks are required to submit their claims on an annual basis duly certified by their statutory auditors as true and correct, within a quarter from the close of the year.

"Any remaining claim pertaining to the disbursements made during the year 2021-22 and not included in the claim as on March 31, 2022 may be consolidated separately and marked as an 'Additional Claim' and submitted latest by June 30, 2023 duly certified by the Statutory Auditors as true and correct," it said.

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