RBI Interest Subvention Scheme (ISS) 2018-19 – Short-term subsidised crop loan to be under DBT mode

Published Date - 09 June 2018 04:27:17 Updated Date - 09 June 2018 04:29:44

Interest subsidy scheme on short-term crop loans of up to Rs 3 lakh will be implemented through the DBT mode from the current financial year, the Reserve Bank said today.

The government has earmarked Rs 15,000 crore for 2018-19 towards interest subvention for short-term crop loans.

In a notification, RBI also said that the Interest Subvention Scheme (ISS) 2018-19 will be required to be settled as applicable in Plan Scheme -- Scheduled Caste (SC), Scheduled Tribe (ST) and North East Region (NER), among others.

The agriculture and farmers welfare ministry has informed RBI that it has initiated the process for continuation of the ISS 2018-19.

As per the scheme, farmers can avail of short-term crop loans of up to Rs 3 lakh at subsidised interest rate of 7 per cent that could go down to 4 per cent on prompt repayment. 

"Further, as advised by Government of India, from 2018-19 the ISS is being put on DBT mode on In kind/services basis and not on In cash basis and all loans processed in 2018-19 are required to be brought on ISS portal/DBT platform, once it is launched," the Reserve Bank added.

The interest subvention of 2 per cent will be calculated on the crop loan amount from the date of its disbursement up to the date of actual repayment by the farmer or up to the due date of the loan fixed by the banks, whichever is earlier, subject to a maximum of one year.

The notification also asked the banks to capture category-wise data (General, SC, ST, etc) of beneficiaries for reporting of the same on ISS portal individual farmer wise to settle the claims arising from 2018-19 onwards.

Under ISS Scheme, govt. provides Interest Subsidy to NABARD, Regional Rural Banks (RRBs), Co-operative Banks, Public Sector Banks & Private Banks. These authorities are responsible to provide Short Term Credit to farmers with a subsidized Rate of Interest.

RBI Interest Subvention Scheme (ISS) 2018-19 – Short Term Crop Loans by DBT

The important features and highlights of this Interest Subsidy Scheme on Crop Loans for farmers are as follows:-

  • All the farmers can now take short term crop loans upto 3 lakhs with an interest subsidy of 7%. This interest will lower down to 4% if the farmers make repayment on time.
  • Govt. will implement ISS 2018-19 on DBT mode on ‘In Kind / Services’ basis and not on ‘In Cash’ basis. For this reason, govt. will launch a new ISS Portal / DBT Platform to process all loans.
  • Terms and Conditions as approved in FY 2017-18 will remain same for Interest Subvention Scheme this year also.
  • On taking loans, govt. will calculate 2% interest subsidy on the total amount of crop loan taken.
  • The duration will be calculated in accordance with the date of disbursement of loan amount to farmers upto the due date or date of actual repayment by farmers, whichever is earlier upto a maximum of 1 year.

RBI is going to launch a new DBT Portal very soon but till then, the banks will have to work as mentioned in the notification. In RBI notification, it is clearly stated that the banks needs to capture Category Wise (General, SC, ST) data of beneficiaries. Banks will then have to upload that report on ISS portal to settle the claims in FY 2018-19.


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