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Posted on Sep 06, 10:11PM | IANS
To ease the burden on farmers specially in drought-hit areas, the cabinet Thursday decided to release Rs.10,901 crore to banks as interest subvention for crop loans up to Rs.300,000 to farmers in FY 2012-13.
Allowing release of the money, the cabinet decided that Rs.3,267 crore subvention be given to Nabard for refinance to cooperatives banks and regional rural banks(RRBs).
An official release said, "to continue interest subvention to Public Sector Banks, Regional Rural Banks (RRBs), Cooperatives Banks and Nabard to enable them to provide short- term crop loans up to Rs.3 lakh to farmers at 7 percent per annum 2012-13."
The government also decided to provide additional interest subvention of 3 percent to those farmers who repay short-term crop loans on time, that is within a year of disbursement.
The government has been subsidising short-term crop loans to farmers in order to ensure the availability of crop loans to farmers for loans up to Rs.300,000 at 7 percent per annum.
The government also approved a proposal to provide interest subvention to small and marginal farmers having Kisan Credit Card for loan against negotiable warehouse receipts for post harvest at 7 percent interest for a period of 6 months.
The statement further said it has decided to permit release of Rs.442 crore as interest subvention to small and marginal farmers having Kisan Credit Card against negotiable warehouse receipts, for post-harvest.