In view of the continuation of the Modified Interest Subvention Scheme by the Centre, the Reserve Bank has asked banks to provide short term crop loans and short term loans for allied activities including animal husbandry, dairy, fisheries, beekeeping etc. upto an overall limit of 3 lakh rupees to farmers at an interest rate of 7 percent. In a notification, RBI said that the rate of interest subvention to lending institutions will be 1.5 percent for 2024-25. RBI has said that an additional interest subvention of 3 percent should be provided to farmers who repay loans in time. RBI has added that Aadhaar linkage would be mandatory for availing the short-term loans.
Meanwhile, in order to discourage distress sale by farmers and to encourage them to store their produce in warehouses, the benefit of interest subvention under Kisan Credit Card scheme will be available to small and marginal farmers for a further period of up to six months post the harvest of the crop.
