SpreadIt News | Digital Newspaper

The Reserve Bank of India (RBI) has revised the rules governing the Interest Subvention Scheme for Crop Loans

The Reserve Bank of India (RBI) changed the rules for banks to claim the amount of interest subvention paid to farmers under the short-term crop credit plan via Kisan Credit Card (KCC) during the previous fiscal year on Thursday.

Pending claims for the fiscal year 2021-22 can be submitted by June 30, 2023, and must be fully validated by statutory auditors “as accurate and correct,” according to a circular issued by the Reserve Bank of India (RBI).

Advertisement

The government provides a 2% annual interest subsidy to banks in order for them to give short-term crop loans of up to 3 lakh to farmers at a 7% annual interest rate.

Farmers that pay their loans on time receive an extra 3% interest subsidy. The effective interest rate for such farmers is 4%.

Advertisement

According to the circular on ‘Modified Interest Subvention Scheme for Short Term Loans for Agriculture and Allied Activities available through Kisan Credit Card (KCC)’ for the fiscal year 2021-22, banks must submit their claims on an annual basis, duly certified by their statutory auditors as true and correct, within a quarter of the year’s end.

Any remaining claim pertaining to disbursements made during the fiscal year 2021-22 that were not included in the claim as of March 31, 2022, maybe consolidated separately and labelled as an ‘Additional Claim,’ and submitted no later than June 30, 2023, duly certified by the Statutory Auditors as true and correct.

Advertisement