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Modified interest subvention for loans through KCC extended till next FY

Modified interest subvention for loans through KCC extended till next FY

The Government of India rbi has approved the continuation of the Interest Subvention Scheme (ISS) with certain modifications for the fiscal years 2022-23 and 2023-24.

In order to provide short term crop loans and short term loans for allied activities, availed through Kisan Credit Card (KCC), including animal husbandry, dairy, fisheries, bee keeping etc. up to an overall limit of ₹3 lakh to farmers through KCC at concessional interest rate during the years 2022-23 and 2023-24, it has been decided by the RBI to provide interest subvention to lending institutions viz. public sector banks (PSBs) and private sector banks (in respect of loans given by their rural and semi-urban branches only), small finance banks (SFBs) and computerized primary agriculture cooperative societies (PACS) which have been ceded with scheduled commercial banks (SCBs), on use of their own resources.

Lending rates to farmers will be 7% in 2022-23 and 2023-24, with lending institutions receiving a 1.5% interest subsidy. Farmers who repay on time will receive an additional interest subvention of 3% per year.

In respect of prompt repayment incentive, banks may submit their one-time consolidated claims pertaining to the disbursements made during the years 2022-23 and 2023-24, accompanied by a Statutory Auditors’ certificate.

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