The Union Cabinet chaired by Prime Minister Narendra Modi on Monday has given its approval to extend repayment date upto 31 August, 2020 for standard short-term loans up to ₹3 lakh advanced by banks for agriculture and allied activities. The facility is for loans that are due or shall become due between 1 March, 2020 and 31 August, 2020.
The government said that the move shall help the farmers to repay/renew such loans upto the extended repayment date of 31 August, 2020 at 4% p.a., interest without attracting any penalty and thus help them in avoiding travelling to banks for such renewal during this Covid-19 pandemic period.
In the wake of lockdown due to ongoing Covid-19 pandemic, there have been restrictions imposed on movement of people. Many farmers are not able to travel to bank branches for payment of their short term crop loan dues. Moreover, due to restrictions on movement of people, difficulty in timely sale, receipt of payment of their produce and the necessity of adhering to social distancing norms, farmers are finding it difficult to arrange the amount to be deposited for renewal and are unable to visit the banks to deposit and draw fresh loans.
The government has been providing concessional standard short-term Agri-loans to farmers through banks with 2% per annum interest subvention to banks and 3% additional benefit on timely repayment to farmers thus providing loans upto Rs,3 lakh at 4% per annum interest on timely repayment.