In order to provide credit to farmers at affordable rates, the Government of India has, since 2006-07, been implementing the Interest Subvention Scheme under which short-term crop loans upto Rs. 3 lakh are made available to the farmers at an interest rate of 7% per annum by the banks. The Government of India in 2009-10 introduced an additional interest subvention of 1% for farmers who repay their loans within the period of interest subvention i.e. within one year of disbursement of such loans. This additional subvention was increased to 2% in 2010-11 and 3% in 2011-12 and 2012-13.The Scheme has been extended to 2013-14. The Interest Subvention Scheme has also been extended to the private sector banks from the year 2013-14. The exposure of Public Sector Banks(PSBs) to agriculture loans outstanding, as on 30th June, 2013, stood at Rs. 5,33,059.75 crore, out of this loans to marginal farmers and small farmers stood at Rs. 96,715.29 crore and Rs. 1,57,921.16 crore, respectively.

This information was given by the Minister of State for Finance, Shri Namo Narain Meena in written reply to a question in Lok Sabha today.

Interest Subvention Scheme extended to private banks and additional timely-repayment subsidy for short-term crop loans continued. The Interest Subvention Scheme provides subsidised short-term crop loans at a concessional interest rate with an additional timely-repayment incentive; both the base subvention and the additional incentive were extended for the stated extension period. The scheme's coverage was expanded to include private sector banks from the extension year, while public sector banks continue to participate; the summary also reports public sector bank agricultural exposures and the shares attributable to marginal and small farmers as of the reporting date.