RBI extends the period for short term crop loans to farmers during the years 2018-19 and 2019-20

Apr 22, 2020 | by Avantis RegTech Legal Research Team


Industry Specific Compliance

The Reserve Bank of India (RBI) on April 21, 2020, has decided to extend the benefit for short term crop loans to farmers whose accounts have become due or shall become due between March 01, 2020 and May 31, 2020.

RBI had granted the moratorium for three months on payment of instalments falling due between March 01, 2020 and May 31, 2020 in respect of all term loans including short term crop loans vide Circular dated March 27, 2020. RBI has observed that many farmers are not able to travel to bank branches for payment of their short term crop loan dues during nationwide lockdown due to outbreak of Covid-19 pandemic.

Thus, banks are advised to continue the availability of 2% Interest Subvention (IS) and 3% Prompt Repayment Incentive (PRI) to farmers for the extended period of repayment upto May 31, 2020 or date of repayment, whichever is earlier, for short term crop loans upto Rupees 3 lakhs per farmer which have become due between March 01, 2020 and May 31, 2020 to ensure that farmers do not have to pay penal interest.

[Notification No. FIDD.CO.FSD.BC.No.24/05.02.001/2019-20]


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