RBI gives additional 60 day period for availing of prompt repayment incentive to farmers

MUMBAI: Aiming to bring relief to farmers hit by the demonetisation drive, the Reserve Bank of India on Monday gave an additional 60 day period for availing of prompt repayment incentive of 3 per cent to those farmers whose crop loan due dates fall between November 1 and December 31 of this year. This notification from RBI comes after government made a similar announcement last week.

Under the interest subvention scheme, farmers get short-term crop loan of up to Rs 3 lakh for one year at an interest rate of 7 per cent. Those repaying on time get the loan at 4 per cent.

“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,” the central bank said in a notification.

The Reserve Bank said that the decision was taken in light of the constraints faced by farmers for timely repayment of loan dues on account of demonetisation.