Government of Odisha prescribes additional Interest Subvention of 2.5% on credit support to Handloom sector

Dec 04, 2019 | by Avantis RegTech Legal Research Team


The State Government of Odisha on November 27, 2019, has prescribed additional Interest Subvention of 2.5% on credit support to Handloom sector against the loans and working capital loans. This was provided in addition to the Interest Subvention of 7% which was made available by the Government of India to handloom weavers for loan by Weaver Credit Card (WCC). However, the Government of India has discontinued WCC scheme and has introduced MUDRA scheme which came into effect from September 01, 2016.

Certain guidelines are provided under the MUDRA scheme which include the participation of willing banks in the areas covering all non-defaulter eligible handloom weavers. It provides the loan at 6% interest for which maximum interest subvention of 7% is given by Government of India. It is available to the non-defaulters loanees to encourage prompt payment to the banks. The scheme shall be implemented up-to financial year 2022-23. 

The amount of 2.5% interest subvention shall be calculated from the date of actual disbursement of loan up to the date of actual repayment of loan by weavers or date fixed by bank whichever is earlier. It shall be applicable to the loan to the extent of maximum Rs. 5,00,000/- per loan amount.

[Resolution no. II-TEX-111/2016/7797/HT&H]

 


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