Untitled Document
Union
Cabinet gives nod for release of Rs 4868 Cr as interest subvention to PSBs
By
TIOL News Service
NEW
DELHI,
JULY 30, 2010: THE Union
Cabinet today gave its approval for the release of a sum of Rs.4,868 crore
(subject to actuals) as interest subvention to Public Sector Banks (PSBs),
Regional Rural Banks (RRBs) and Cooperative Banks and to NABARD for refinance
to RRBs and Cooperative Banks at concessional rates to reimburse the amount
of interest subvention to ensure that the farmer, in general, should receive
short term crop loan at 7 percent per annum ( 5 percent for prompt payers)
with an upper limit of Rs. 3 lakhs on the principal amount during 2010-11.
The Government has since 2006-07 been subsidizing short term crop loans to
farmers in order to ensure the availability of crop loans to farmers for loans
up to Rs. 3.00 lakh, at 7 percent per annum. This Interest Subvention Scheme
has been further continued for 2010-11 for Public Sector Banks, Regional Rural
Banks and Cooperative Banks. In the year 2009-10, an additional subvention
of one percent was being provided to farmers who repay on time. This has been
increased from one percent in 2009-10 to two percent in 2010-11. Thus, the
effective rate of interest for such farmers will be five per cent per annum.
The banks have been consistently meeting the targets set for agriculture credit
flow in the past few years. For the year 2010-11, the target for agricultural
credit flow has been raised to Rs.3,75,000 crore from Rs.3,25,000 crore in
the year 2009-10.
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