Coronavirus pandemic | Interest subvention, repayment incentives for short term loans to continue for farmers

The Reserve Bank of India (RBI) has said that interest subvention and prompt repayment incentives (PRIs) on instalments due between March 1 and May 31, will continue for farmers who have taken short-term crop loans but are unable repay due to the lockdown, said a report by Business Standard.

The government will meanwhile continue the facility of 2 percent interest subvention and 3 percent PRI for short term loans up to Rs 3 lakh per farmer, it said. This will be up to May 31 or the date of repayment, whichever is earlier.

While the government has allowed agricultural activities to continue during the coronavirus lockdown, farmers have been unable to visit banks due to movement restrictions. The move will ensure that penal interest is not imposed for the duration, while they continue getting benefits, it noted.

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The lockdown, which began on March 24 till April 14 in the first phase is now in the second phase scheduled till May 3. Certain activities have been allowed from April 20 in ‘green’ areas which have not recorded a single new COVID-19 case.

Besides this, the RBI has already granted a three-month moratorium on all term loan repayments due between March 1 and May 31.