The Impressive TimesThe Reserve Bank of India (RBI), in view of the continuation of the Modified Interest Subvention Scheme by the central government, has asked banks to provide short-term crop loans and loans for allied activities such as animal husbandry, dairy, fisheries, and beekeeping up to a limit of ₹3 lakh per farmer at an interest rate of 7%. The RBI has stated that the interest subvention rate for lending institutions will be 1.5% for the financial year 2024-25. Additionally, farmers who repay their loans on time will receive an extra interest subvention of 3%, effectively reducing their interest rate. Aadhaar linkage is mandatory to avail these short-term loans.
Moreover, to discourage distress sales by farmers and encourage the storage of produce in warehouses, the benefit of interest subvention under the Kisan Credit Card scheme will be extended to small and marginal farmers for up to six months post-harvest.
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