The Chairman / Managing Director
All Public & Private Sector Scheduled Commercial Banks
Interest Subvention Scheme for
Short Term Crop Loans during the year 2016-17- Grant of grace period of 60
days beyond due date
As you are aware the Government
of India (GoI) has been implementing the Interest Subvention Scheme (the
Scheme) since 2006-07. In terms of the extant Scheme for the year 2016-17
besides subvention of 2% per annum, an additional interest subvention of 3%
is also provided to prompt payee farmers from the date of disbursement of
the crop loan upto the actual date of repayment by farmers or upto the due
date fixed by banks for repayment of crop loans whichever is earlier subject
to a maximum period of one year from the date of disbursement. This benefit
does not accrue to those farmers who repay after one year of availing such
2. In view of the constraints
faced by farmers for timely repayment of loan dues on account of withdrawal
of legal tender status of Specified Bank Notes (SBNs) and the subsequent notification No.
DBR.No.BP.BC.37/21.04.048/2016-17 dated November 21, 2016 issued
by RBI, it has been decided by the GoI to provide an additional grace period of 60 days for prompt repayment incentive of 3% to those
farmers whose crop loan dues are falling due between 1st November, 2016 and
31st December, 2016 if such farmers repay the same within 60 days from the
above period. As regards asset classification and other prudential norms
are concerned, the extant RBI guidelines, including the circular dated
November 21, 2016 will continue to apply.
3. Banks may give adequate
publicity to the above so that the farmers can avail the benefits.
4. Banks may consider the above
while submitting their one-time consolidated 3% additional subvention
claims pertaining to the disbursements made during the entire year 2016-17.
Chief General Manager