RBI issues guidelines on interest subvention scheme for Fisheries and Animal Husbandry farmers

Provides benefits of Interest Subvention at 2% and Prompt Repayment Incentive (PRI) at 3%

The government has extended KCC facility to animal husbandry farmers and fisheries as announced in the Interim Budget 2019-20 for their working capital requirements providing the benefits of Interest Subvention at 2% and Prompt Repayment Incentive (PRI) at 3%.

In this regard, the Government of India has now issued the operational guidelines of the Interest Subvention Scheme for Kisan Credit Card facility to fisheries and animal husbandry farmers for a period of two years i.e. 2018-19 and 2019-20.

It has been decided to provide interest subvention of 2% per annum to lending institutions viz. Public Sector Banks (PSBs) and Private Sector Commercial Banks (in respect of loans given by their rural and semi-urban branches only) on use of their own resources. This interest subvention of 2% will be calculated on the loan amount from the date of its disbursement / drawal upto the date of actual repayment of the loan by the farmer or up to the due date of the loan fixed by the banks, whichever is earlier, subject to a maximum period of one year.

In case of farmers possessing KCC for raising crops and involved in activities related to animal husbandry and/or fisheries, the KCC for animal husbandry/fisheries shall be within the overall limit of Rs 3 lakh.

The farmers repaying promptly as above would get short term loans @ 4% per annum after an additional interest subvention of 3% per annum during the years 2018-19 and 2019-20.

Interest subvention is to be provided on a maximum limit of Rs 2 lakh short term loan to farmers involved in animal husbandry and fisheries.

The farmers already possessing KCC (crop loan) and involved in animal husbandry & fisheries activities, can avail a sub-limit for such activities. However, the interest subvention and prompt repayment incentive benefit on short term loan (i.e. crop loan+ working capital loan for animal husbandry and fisheries) will be available only on an overall limit of Rs 3 lakh per annum and subject to a maximum limit of Rs 2 lakh per farmer involved in activities only related to animal husbandry and / or fisheries.

The limit for crop loan component will take priority for interest subvention and prompt repayment incentive benefits and the residual amount will be considered towards animal husbandry and / or fisheries subject to cap as mentioned above.

To ensure hassle-free benefits to farmers under Interest Subvention Scheme, banks are advised to make Aadhar linkage mandatory for availing short-term loans for Animal Husbandry and Fisheries in 2018-19 and 2019-20.

The Interest Subvention Scheme is being put on DBT mode on 'In Kind/services' basis and all short term loans processed from 2018-19 are required to be brought on ISS portal / DBT platform. Banks are advised to capture and submit the category wise data of beneficiaries under the scheme and report the same on ISS portal individual farmer wise once it is launched by the Ministry of Agriculture and Farmers Welfare to settle the claims arising from 2018-19 onwards.

In respect of 2% interest subvention, banks are required to submit their claims on a half-yearly basis as on September 30 and March 31 for the years 2018-2019 and 2019-2020, of which, the latter needs to be accompanied by a Statutory Auditor's certificate certifying the claims for subvention for the financial year ended on March 31 of the corresponding year as true and correct.

In respect of 3% prompt repayment incentive, banks may submit their one-time consolidated claims pertaining to the disbursements made during the years 2018-19 and 2019-20, accompanied by Statutory Auditor's certificate certifying the claim as true and correct.

Any remaining claim pertaining to the disbursements made during the years 2018-19 and 2019-20 and due during 2019-20 and 2020-21 respectively, may be consolidated separately and marked as an 'Additional Claim' duly certified by the Statutory Auditor as true and correct.

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