The State level Bankers’ Committee which met in the presence of Maharashtra Chief Minister Uddhav Thackeray in Mumbai, has approved a resolution asking for restoration of 2 percent interest subvention.
In a letter to Agriculture Minister Narendra Singh Tomar, Thackeray said a circular issued earlier this year by the farm ministry and NABARD (National Bank for Agriculture and Rural Development) said that the 2 percent interest subvention scheme for short-term crop loans had been modified and the subsidy would not be available from fiscal 2022-23.
“This (discontinuation of scheme) will have an adverse impact on the financial position of cooperative banks and, in turn, will have a serious negative impact on the distribution of short-term crop loans to farmers in the state,” the CM said in the letter.
Thackeray said 2 percent interest subvention or subsidy available to cooperative as well as nationalized banks under the scheme, had enabled these lending institutions to disburse short-term crop loans to farmers at concessional rates.
The Bankers’ Committee also approved a Rs 26 lakh 33,000 crore credit plan, which is 45.37 percent higher than that of last year.
The agriculture sector has been allocated Rs 1 lakh 26,000 crores, which includes Rs 64,000 crore for crop loans. Thackeray said banks should extend loans to farmers as the monsoon is all set to commence.
About Interest Subvention Scheme for Farmers:
The interest subvention scheme for farmers aims to provide farmers with short-term credit at a reduced interest rate. The policy went into effect in the Kharif of 2006-07. The scheme is being implemented for the 2020-21 fiscal year.
The interest subvention will be given to Public Sector Banks (PSBs), Private Sector Banks (PSBs), Cooperative Banks, and Regional Rural Banks (RRBs) on the basis of their own funds, as well as to NABARD for refinancing RRBs and Cooperative Banks. NABARD and the RBI are implementing the Interest Subvention Scheme.
