loan

Union Cabinet’s approval to interest subsidy for farmer loans
The Union Cabinet has given its approval to continue interest subsidy to Public Sector Banks (PSBs), Regional Rural
Banks (RRBs), Cooperatives Banks and NABARD allowing them to grant short-term crop loans of up to Rs 3 lakhs to
farmers at 7% p.a. during the year 2012-13.
A surplus interest subsidy of 3% p.a. will also be provided to those farmers who repay loans within one year of
disbursement in the current fiscal year.
As per the decision, Rs 10901 crore will be released as interest subvention for 2012-13. Small and marginal farmers
having Kisan Credit Cards will be provide with interest subsidy for loans. Release of 442 crore rupees as interest
subsidy to small and marginal farmers having Kisan Credit Cards against negotiable warehouse receipts, for postharvest
has also been approved.
The Govt has subsidized short-term crop loans to farmers since 2006-07 to ascertain the availability of crop loans to
farmers of upto Rs.3 lakh at 7% p.a. Banks have been consistent in accomplishing the goal set for agriculture credit
flow in the past years. For the year 2012-13, the target for agricultural credit flow has been elevated to Rs 575000
crore from Rs 475000 crore in the year 2011-12.