The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its ex-post facto approval for interest waiver for the two months of November and December, 2016 for farmers accessing short term crop loans from Cooperative Banks.
The decision also provides for interest subvention to National Bank for Agricultural and Rural Development (NABARD) on additional refinance by NABARD to Cooperative Banks.
Farmers in the whole of India availing short term crop loans, from Cooperative Banks will be benefitted.
The decision intends to ensure availability of resources with Cooperative Banks help farmers in easily accessing crop loans from Cooperative Banks to overcome the difficulties in view of the reduction in availability of cash for carrying out Rabi operations.
Additional resources are to be provided to Cooperative Banks through NABARD for refinance to the Cooperative Banks on account of interest waiver of two months for November and December, 2016. This will be extended by Cooperative Banks to the farmers in the current financial year 2016-17.
An additional financial liability of Rs. 1060.50 crore will be required for this purpose. A sum of Rs. 15, 000 crore allocated during 2016-17 to implement the Interest Subvention Scheme (ISS) has already been utilised.