Interest Subvention Scheme to the Banks

This scheme was implemented as per Government Resolution No. CCR-1406/Pr.Kr. 247/2-S dated 17.05.2006. Under this scheme, banks are provided with interest subvention to ensure that farmers in the state receive short-term crop loans at an annual interest rate of six percent. To make production and crop loans available to farmers at low interest rates. If banks provide loans at an interest rate of seven percent, the Central Government gives an interest subvention of one percent. Similarly, if banks provide loans at a six percent interest rate, the State Government gives an additional one percent interest subvention.

Under this scheme, nationalized banks, regional rural banks, and private banks are provided with a one percent interest subvention. Furthermore, as per the Government Resolution dated 05.09.2014, the interest subvention rate for District Central Cooperative Banks has been revised to 2.5%. Interest subvention is not applicable on refinance taken by commercial banks and district central cooperative banks from NABARD.

Under this scheme, only crop loans up to ₹3 lakh given to farmers are considered. The interest subvention amount is calculated from the date the loan is issued until the date of repayment or the due date for repayment—whichever is earlier (i.e., March 31 for the Kharif season and June 30 for the Rabi season).

In the financial year 2024-25 ₹60 crore has been given as interest subvention to commercial banks at a rate of 1%. and ₹534.61 crore has been provided to District Central Cooperative Banks as interest subvention.

Beneficiary:

Farmers

Benefits:

As mentioned above