Reserve Bank of India (RBI) on Wednesday said the interest rate for short-term loans upto Rs 300,000 through Kisan Credit cards (KCC) will be seven per cent and interest subsidy will be 1.5 per cent for the current financial year (FY23) and next financial year (FY24).
The farmers who repay loans promptly will get an additional three per cent subsidy. Thus, the interest rate charged to these farmers will be four per cent.
These loans will be short-term crop loans and short-term loans for allied activities including animal husbandry, dairy, fisheries, beekeeping etc. The government of India has approved the continuation of the Interest Subvention Scheme (ISS) with modification for the financial years 2022-23 and 2023-24, RBI said.
The subvention will be provided to lenders including Public Sector Banks (PSBs) and Private Sector Banks (rural and semi-urban branches), Small Finance Banks (SFBs) and computerized Primary Agriculture Cooperative Societies (PACS) on use of their own resources, it added.