New Delhi In view of the lockdown implemented for the prevention of corono virus epidemic, the government has decided to continue the incentive of two percent interest on crop loans to farmers and three percent on prompt repayment till 31 August 2020. In April, interest rebates and accelerated repayment incentives were extended until the end of May.
The RBI said, this benefit would be applicable to all short-term loans of Rs 3 lakh per farmer (up to Rs 2 lakh for AHDF farmers) for agriculture and animal husbandry, dairy and fisheries (AHDF).
To provide short-term crop loans of up to Rs 3 lakh to farmers at an interest rate of 7 per cent per annum, the government gives interest subvention of 2 per cent per annum to banks.
Apart from this, 3 percent interest subvention is given to those farmers who pay their debts soon. For such farmers, the effective interest rate is 4 percent.
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