In a notification on Tuesday, the Reserve Bank of India (RBI) said that the benefits of Interest Subvention (IS) and Prompt Repayment Incentive (PRI) for Short Term Crop Loans during the years 2018-19 and 2019-20 will be extended on account of the COVID-19.
"In the wake of the nationwide lockdown due to outbreak of COVID -19 pandemic and the resultant restrictions imposed on movement of people, many farmers are not able to travel to bank branches for payment of their short term crop loan dues," RBI's statement said.
The central bank further said that the 3-month moratorium granted on payment of installments falling due between 1 March to 31 May 2020 allowed by it as part of the COVID 19-Regulatory Package announced on 27 March included all term loans including short term crop loans.
"Accordingly, to ensure that farmers do not have to pay penal interest and at the same time continue getting the benefits of interest subvention scheme, Government has decided to continue the availability of 2% IS and 3% PRI to farmers for the extended period of repayment upto 31.05.2020 or date of repayment, whichever is earlier, for short term crop loans upto ₹3 lakh per farmer which have become due between March 01, 2020 and May 31, 2020," RBIs' statement said.
It advised banks to extend the benefit of IS of 2% and PRI of 3% for short term crop loans up to Rs 3 lakh to farmers whose accounts have become due or shall become due between 1 March and 31 May 2020.
"All other terms and conditions remained unchanged," it added.