Giving a major relief to the farmers facing cash crunch after the demonetisation of the Rs 500 and the Rs 1000 notes, the Reserve Bank of India (RBI) has decided to provide additional 60 days grace period for repayment of crop loans for prompt repayment incentive of 3 percent to those farmers whose crop loan dues are falling due between 1 November and 31 December.
In order to encourage timely payment, as per the interest subvention scheme for the year 2016-17 besides subvention of 2 per cent per annum, an additional interest subvention of 3 per cent is provided to prompt payee farmers from the date of disbursement of the crop loan. Under the interest subvention scheme, farmers get short-term crop loan of up to Rs 3 lakh for one year at an interest rate of 7 per cent and those repaying on time get the loan at 4 per cent.
The central bank said that if the farmers, whose crop loan repayment date falls between 1 November and 31 December, repay the crop loan within 60 days from their loan repayment date, the additional three percent interest rebate will continue to apply but this benefit would not accrue to those farmers who repay after one year of availing such loans.