The Union Cabinet on Monday gave its approval to extend repayment date up to August 31 for standard short-term loans up to Rs 3 lakh given for agriculture and allied activities by banks.
This is applicable to loans which have become due or shall become due between March 1, 2020, and August 31, 2020, with continued benefit of two per cent Interest Subvention (IS) to banks and three per cent Prompt Repayment Incentive (PRI) to farmers.
An official release said that the move will help farmers to repay or renew such loans up to the extended repayment date at 4 per cent interest per annum without attracting any penalty and thus help them avoid travelling to banks for such renewal during this COVID pandemic period.
It said that the government is providing concessional standard short-term agri-loans to farmers through banks with two per cent per annum interest subvention to banks and three per cent additional benefit on timely repayment to farmers thus providing loans up to Rs 3 lakh at 4 per cent interest on timely repayment.
With travel restrictions in place during lockdown enforced to contain the spread of COVID-19, many farmers were not able to travel to bank branches for payment of their short term crop loan dues.
Also, due to restrictions on the movement of people, difficulty in the timely sale, receipt of payment of their produce and the necessity of adhering to social distancing norms, farmers were finding it difficult to arrange the amount to be deposited for renewal and were unable to visit the banks to draw fresh loans.