RBI / 2011-12/ 344
RPCD.No.PLFS.BC.54/05.04.02/2011-12
January 9, 2012
The Chairman/Managing Director
All Public Sector Banks
Dear Sir,
Union Budget – 2011-12 – Interest Subvention Scheme – 2 per cent interest subvention and 3 per cent additional subvention for short-term crop loans in 2011-12
As you are aware, the Hon’ble Finance Minister, in his Budget Speech (paragraph 63) for 2011-12 had announced as follows:
"In the last budget, I had provided an additional two per cent interest subvention as an incentive to those farmers who repay their short-term crop loans as per schedule. I propose to raise this subvention for timely repayment of crop loans from two per cent to three per cent for 2011-12. Thus, the effective rate of interest for such farmers will now be four per cent per annum. ".
2. In pursuance of this announcement, Government of India will provide interest subvention of 2 % p.a. to Public Sector Banks in respect of short-term production credit up to Rs.3 lakh during the year 2011-12. This amount of subvention will be calculated on the crop loan amount from the date of its disbursement/drawal up to the date of actual repayment of the crop loan by the farmer or up to the due date of the loan fixed by the banks for the repayment of the loan, whichever is earlier, subject to a maximum period of one year. This subvention will be available to Public Sector Banks on the condition that they make available short-term production credit up to Rs. 3 lakh at ground level at 7% p.a.
3. Banks are advised to immediately submit their estimates of short-term production credit to farmers up to Rs.3.00 lakh during the year 2011-12, to enable us to provide Government with an estimate of the likely amount of subvention. Please note that the estimates should be realistic in nature.
4. In pursuance of the above announcement, Government of India will also provide additional interest subvention of 3% p.a. to Public Sector Banks in respect of those prompt paying farmers who repay their short-term production credit within one year of disbursement/drawal of such loans. This subvention will be available to such farmers on the short-term production credit up to a maximum amount of Rs.3 lakh availed of by them during the year, from the date of disbursement/drawal of the crop loan up to the actual date of repayment by farmers or up to the due date fixed by the bank for repayment of crop loan, whichever is earlier, subject to a maximum period of one year from the date of disbursement. This additional subvention will be available to Public Sector Banks on the condition that the effective rate of interest on short-term production credit up to Rs. 3 lakh for such farmers will now be 4 % p.a. This benefit would not accrue to those farmers who repay after one year of availing such loans.
5. For the appropriate growth and development of the warehousing sector in the country and to bring efficiency in the conduct of the warehousing business, the Government of India has introduced a negotiable warehouse receipt (NWR) system in the country by enacting the Warehousing (Development & Regulatory) Act, 2007. At present concessional crop loan @ 7 % with interest rate subvention is available to farmers as pre-harvest loan. However, in case of pre-harvest loan against negotiable warehouse receipts, the farmers are granted loans at commercial rates. In order to discourage distress by farmers and to encourage them to store their produce in warehousing against warehouse receipts, the benefits of interest subvention will be available to small and marginal farmers having Kisan Credit Card for a further period of up to six months post harvest on the same rate as available to crop loan against negotiable warehouse receipt for keeping their produce in warehouses.
6. Banks may give adequate publicity to the above scheme so that the farmers can avail the benefits.
7. It is also advised as under:-
Claims in respect of 2 % interest subvention and 3 % additional interest subvention may be submitted in Formats I and II (enclosed herewith) respectively to the Chief General Manager-in-Charge, Rural Planning and Credit Department, Reserve Bank of India, Central Office, Shahid Bhagat Singh Road, Fort, Mumbai – 400 001.
i) In respect of 2 % interest subvention, banks are required to submit their claims on a half-yearly basis as at September 30, 2011 and March 31, 2012, of which, the latter needs to be accompanied by a Statutory Auditor’s certificate certifying the claims for subvention for the entire year ended March 31, 2012 as true and correct. Any remaining claim pertaining to the disbursements made during the year 2011-12 and not included in the claim for March 31, 2012, may be consolidated separately and marked as an 'Additional Claim' and submitted latest by April 30, 2013, duly audited by Statutory Auditors certifying the correctness.
ii) In respect of the 3% additional subvention, banks may submit their one-time consolidated claims pertaining to the disbursements made during the entire year 2011-12 latest by April 30, 2013, duly audited by Statutory Auditors certifying the correctness.
8. In case of RRBs and co-operatives, a separate circular will be issued by NABARD.
Yours faithfully,
(C. D. Srinivasan)
Chief General Manager
Encl: Two
FORMAT -I
Claim for 2 per cent Interest Subvention on Short-term Crop Loan up to Rs. 3 lakh for the year 2011-12
Name of the Bank:
Statement for the half year ended September 2011/ March 2012/ Additional Claim.
Total short term production credit at 7% p.a
Amount of subvention claimed
(Rs. in actuals)
No. of accounts.
(in thousands)
Amount
(Rs. lakh)
Loans up to Rs.50,000/-
Loans above Rs.50,000/- and up to Rs.3 lakh.
Total
We certify having disbursed the above loans at 7% p.a. up to Rs. 3 lakh by way of short- term production credit to the farmers during the year 2011-12.
Date:
Authorised Signatory
(This claim format needs to be duly certified by Statutory Auditors except for the Statement for the half year ended September 2011.)
FORMAT –II
One – time Claim for Additional 3 per cent Subvention for timely repayment of short-term crop loans up to Rs. 3 lakh disbursed in 2011-12
Name of the Bank:
Total short term production credit upto Rs. 3 lakh
Total short term production credit which were repaid in time
Amount of additional subvention claimed @ 3%
(Rs. in actuals)
No. of accounts.
(in thousands)
Amount
(Rs.lakh)
No. of accounts.
(in thousands)
Amount
(Rs.lakh)
Loans up to Rs.50,000/-
Loans above Rs.50,000/- and up to Rs.3 lakh.
Total
We certify that the above loans for which the claim is being made were repaid in time and the benefit of additional 3 percent incentive subvention has already been passed on to the account holders, thereby bringing down the interest rate for such farmers to 4 per cent per annum for short term production credit up to Rs. 3 lakh disbursed during 2011-12 for these farmers.
Date:
Authorised Signatory
(This claim format needs to be duly certified by Statutory Auditors)
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Notification No : RBI / 2011-12/ 344Published in Others