RBI Allows 60 days Grace Period (beyond due date) to Farmers under Interest Subvention Scheme for Short Term Crop Loans falling due between 1 Nov. 2016 to 31 Dec. 2016
Since 2006-07 Govt. is continuing the Interest Subvention Scheme and for FY 2016-17 interest subvention of 2% p.a. (normal) and 3% p.a. (additional) is provided to prompt payee farmers from the date of disbursement of the crop loan upto the actual date of repayment by farmers or upto the due date fixed by banks for repayment of crop loans whichever is earlier subject to a maximum period of one year from the date of disbursement. This benefit does not accrue to those farmers who repay after one year of availing such loans.
2. In view of the constraints faced by farmers for timely repayment of loan dues on account of withdrawal of legal tender status of Specified Bank Notes (SBNs) it has been decided by the GoI to provide an additional grace period of 60 days for prompt repayment incentive of 3% to those farmers whose crop loan dues are falling due between 1st November, 2016 and 31st December, 2016 if such farmers repay the same within 60 days from the above period. As regards asset classification and other prudential norms are concerned, the extant RBI guidelines, including the circular dated November 21, 2016 will continue to apply.