RBI modifies norms for banks on short term crop loan scheme

RBI 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”, Reserve Bank of India (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 per cent per annum, the government offers interest subvention of 2 per cent annually to banks. An additional 3 per cent interest subvention is provided to farmers who pay their loans promptly. For such farmers, the effective interest rate is 4 per cent.