May 26, 2024

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RBI asks banks to extend farm loans eligible for subvention only via KCCs


The Reserve Bank of India has recommended banks to assure that all brief term crop loans suitable for desire subvention and prompt reimbursement incentive reward are extended only by means of the Kisan Credit history Card (KCC) with result from April 1, 2020.

Further, the current brief term crop loans which are not extended by means of KCC will require to be transformed to KCC loans by March 31, 2020.

Accordingly, reimbursement of desire subvention for brief term crop loans by means of non-KCC accounts will not be considered over and above March 31, 2020, the RBI stated in a round.

To deliver brief term crop loans up to Rs three lakhs to farmers at an desire amount of 7 per cent, the federal government presents desire subvention of 2 per cent to the lending institutions. It also gives an added desire subvention of three per cent to such of these farmers having to pay in time. This also indicates that the farmers having to pay promptly get brief term crop loans at four per cent.

The KCC scheme aims to deliver sufficient and well timed credit score assistance from the banking procedure beneath a single window with a adaptable and simplified technique to the farmers for their cultivation and other desires.

The scheme is created to fulfill costs relating to write-up-harvest deliver internet marketing usage prerequisites of farmer household doing work money for routine maintenance of farm belongings and pursuits allied to agriculture investment credit score prerequisite for agriculture and allied pursuits.

The beneficiaries beneath the KCC scheme are issued a Good card / Debit card (Biometric smart card appropriate for use in the ATMs/Handheld Swipe Devices and capable of storing sufficient information on farmers identification, belongings, land holdings and credit score profile etc).