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Modified Interest Subvention Scheme for Short Term Loans for Agriculture and Allied Activities availed through Kisan Credit Card (KCC) during the financial years 2022-23 and 2023-24.
RBI Circular - RBI/2022-23/139 FIDD.CO.FSD.BC.No.13/05.02.001/2022-23 Dated November 23, 2022
To ensure that the farmers have to pay a minimal interest rate to the bank, the Government of India introduced Interest Subvention Scheme (ISS), now renamed as Modified Interest Subvention Scheme (MISS), to provide short term credit to farmers at subsidized interest rates.
On 17th August 2022 Cabinet approves Interest subvention on Short Term Agriculture Loan upto Rupees Three lakh.
Interest Subvention Scheme (ISS) - Eligibility
Public Sector Banks (PSBs) and Private Sector Banks (in respect of loans given by their rural and semi-urban branches only), Small Finance Banks (SFBs) and computerized Primary Agriculture Cooperative Societies (PACS) which have been ceded with Scheduled Commercial Banks (SCBs), on use of their own resources.
This interest subvention will be calculated on the loan amount from the date of disbursement / drawal up to the date of actual repayment of the loan by the farmer or up to the due date of the loan fixed by the banks, whichever is earlier, subject to a maximum period of one year.
The applicable lending rate to farmers and the rate of interest subvention for the financial years 2022-23 and 2023-24 will be as follows:
Financial Year Lending Rate to Farmers Rate of Interest
2022-23 7% 1.50%
An additional interest subvention of 3% per annum will be provided to such of those farmers repaying in time, i.e.,
from the date of disbursement of the loan/s
upto the actual date of repayment or upto the due date fixed by the banks for repayment of such loan/s,
whichever is earlier,
subject to a maximum period of one year from the date of disbursement.
This also implies that the farmers repaying promptly as above would get short term crop loans and/or short term loans for allied activities including animal husbandry, dairy, fisheries, bee keeping etc. @ 4% per annum during the financial years 2022-23 and 2023-24.
This benefit would not accrue to those farmers who repay their agri loans after one year of availing such loans.
Interest subvention and prompt repayment incentive benefits on short term crop loans and short term loans for allied activities will be available on an overall limit of ₹3 lakh per annum
subject to a maximum sub-limit of ₹2 lakh per farmer in respect of those farmers involved only in activities related to animal husbandry, dairy, fisheries, bee keeping etc.
The limit for crop loan component will take priority for interest subvention and prompt repayment incentive benefits and the residual amount will be considered towards allied activities including animal husbandry, dairy, fisheries, bee keeping etc. subject to the cap as mentioned above
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