Farmers to get Fiscal Year 2015 rate relief
Banks to follow 2014-15 guidelines and give interest subsidy to farmers
Hyderabad: In a decision that could hint at a higher compensation for damaged crops, the RBI on Thursday advised banks to follow 2014-15 guidelines for allowing interest subsidy to farmers till June 30 in the current fiscal as the government has not yet finalised a new scheme for 2015-16.
“As regards the scheme for the (fiscal) year 2015-16, government of India has advised that presently various alternative approaches for improving the efficacy of the Scheme are being examined, the finalisation of which may take some time,” the RBI said.
On April 8, PM Narendra Modi promised to raise by 50 per cent the quantum of compensation to farmers hit by unseasonal rains. As an interim measure, RBI has decided to apply the last fiscal’s guidelines until June 30 for granting interest subvention for short-term crop loans for the year 2014-15.
The RBI allows two per cent interest subsidy on funds used for short-term crop loans up to '3 lakh per farmer, if such loans are provided at seven per cent.