16 April, Mumbai
The Reserve Bank today said that it is working on a new scheme for interest subvention for farmers.
In a notification issued from Mumbai Thursday , RBI said it is examining the various alternative approaches for improving the efficacy of the scheme as advised by the government. Hence, the RBI has instructed banks to continue the earlier interest subvention scheme till June 30th since the new scheme may take some time to finalise.
In 2014-15, interest subvention of 2 per cent was made available to banks on funds used for short-term crop loans up to Rs 3 lakh per farmer subject to some conditions. Also, additional interest subvention at the rate 3 per cent was made available to farmers repaying loans promptly.
Last week, Prime Minister Narendra Modi had announced a raise of 50 percent in the quantum of compensation to farmers affected by crop losses due to recent unseasonal rains. Besides, the criterion of 50 per cent crop damage for providing compensation to farmers had been reduced to 33 per cent.
The Prime Minister had also asked insurance companies to expeditiously settle the claims of the distressed farmers.