To assist banks stick with it with crop loans prolonged to farmers at low charges and to make sure credit score to the farm sector, the Cabinet on Wednesday cleared the choice to pitch in with 1.5 per cent curiosity subvention to all monetary establishments for FY23 and FY24.
Under the Interest Subvention Scheme (ISS), lenders provide a 3 per cent curiosity subvention on short-term agriculture loans of as much as Rs 3 lakh — initially provided at 7 per cent curiosity, and prolonged to farmers and people concerned in fisheries and animal husbandry — to debtors who repay the loans on time, successfully making them cheaper.
The improve in curiosity subvention assist requires extra budgetary provisions of Rs 34,856 crore, which was cleared by the Union Cabinet.
“This will help the farmers in an indirect way and will directly help the financial institutions to continue to keep extending the loans to farmers, in the wake of revision of repo rates by the RBI,” Information and Broadcasting Minister Anurag Thakur stated whereas briefing the media after the Cabinet assembly.