Farmers get additional 60 days to repay crop loans
According to a notification released on the RBI website, farmers will get two months’ additional time to repay loans falling due between 1 November and 31 December
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New Delhi: In view of cash flow constraints owing to demonetization, the government has decided to provide an additional 60-day grace period on loan repayment to farmers who are eligible for interest subvention on short-term crop loans.
According to a notification released on the Reserve Bank of India (RBI) website, farmers will get two months’ additional time to repay loans falling due between 1 November and 31 December.
Under the interest subvention scheme, farmers who repay on time are eligible for an additional 3% interest relief over and above the 2% subvention that they get.
“It has been decided by the government to provide an additional grace period of 60 days for prompt repayment incentive of 3% to those farmers whose crop loan dues are falling due between 1st November, 2016 and 31st December, 2016 if such farmers repay the same within 60 days from the above period,” RBI said in its notification.
Further, the notification also highlighted that these crop loans will continue to be treated as standard loans on the books of banks during this period. This is in keeping with the notification released by the RBI a month earlier when it had said that banks and NBFCs will get 60 more days to classify stressed standard accounts as non-performing assets (NPAs), if the payments are due between 1 November and 31 December. This was for loans up to Rs1 crore, whether business or personal, secured or otherwise, including home loans and agriculture loans.