Big relief for farmers: RBI gives additional 60 days to repay crop loans

Mumbai: In a major relief to farmers, they will now have 60 more days to repay their crop loans due for November-December as the Reserve Bank of India (RBI) on Monday gave them an additional time to repay.

This means that the farmers, hit by demonetisation, will have till February end of 2017 to repay their crop loans.

The RBI also said the paymets made by farmers would be eligible for the extra 3 percent interest subsidy.

The government has been implementing the Interest Subvention Scheme since 2006-07. As per the scheme for the year 2016-17 besides subvention of 2 per cent per annum, an additional interest subvention of 3 per cent is also provided to prompt payee farmers from the date of disbursement of the crop loan.

This subvention benefit does not accrue to those farmers who repay after one year of availing such loans.

"In view of the constraints faced by farmers for timely repayment of loan dues on account of withdrawal of legal tender status of old Rs 500/1,000, the RBI said the Government of India (GoI) has decided to provide the grace period.

"...It has been decided by the GoI to provide an additional grace period of 60 days for prompt repayment incentive of 3 per cent to those farmers whose crop loan dues are falling due between November 1 and December 31, 2016 if such farmers repay the same within 60 days from the above period," the RBI said in a notification.

Following demonetisation of old high denomination notes from November 9 and subsequent limits on withdrawals, queues have been witnessed at banks and ATMs all across the country.