"A subvention of 2 per cent per annum will be made available to... For short-term crop loan up to Rs 3,00,000 per farmer, provided the lending institutions make available short-term credit at the ground level at 7 per cent per annum to farmers," RBI said in a notification.
An additional interest subvention of 3 per cent per annum will be available to the "prompt payee farmers".
In order to discourage distress sale by farmers and encourage them to store their produce in warehouses, the subvention will be given to small and marginal farmers with a Kisan Credit Card for a further period of up to six months post-harvest on the same rate as available to crop loan against negotiable warehouse receipt.
To provide relief to farmers affected by natural calamities, the interest subvention of 2 per cent will continue to be available to banks for the first year on the restructured amount.
The government had announced the interest subvention scheme for the fiscal in the Budget. It was earlier implemented by the Finance Ministry, but transferred to the Agriculture Ministry this year.