Reserve Bank of India (RBI) has issued directions for Relief Measures to be provided by respective lending institutions in areas affected by natural calamities which, inter alia, include restructuring/rescheduling of existing crop loans and term loans, extending fresh loans, relaxed security and margin norms, moratorium, etc. These directions have been so designed that the moment calamity is declared by the concerned District Authorities, they are automatically set in motion without any intervention, thus saving precious time. The benchmark for initiating relief measures by banks has been reduced from 50% to 33% crop loss in line with the National Disaster Management Framework. Banks have been advised not to insist for additional collateral security for restructured loans.

With a view to ensure availability of agriculture credit at a reduced interest rate of 7% p.a. to the farmers, the Government of India in the Department of Agriculture Cooperation and Farmers Welfare (DAC&FW) implements an interest subvention scheme for short term crop loans up to ₹ 3.00 lakh. The scheme provides interest subvention of 2% per annum to Banks on use of their own resources.  Besides, additional 3% incentive is given to the farmers for prompt repayment of the loan, thereby reducing the effective rate of interest to 4%.

Under the aforesaid interest subvention scheme, to provide relief to farmers affected by natural calamities, the interest subvention (2%) on crop loan continues to be available to banks for the first year on the restructured amount. Such restructured loans may, however, attract normal rate of interest from the second year onwards as per the policy laid down by the Reserve Bank of India (RBI).

In order to provide relief to the farmers affected due to severe natural calamities, the Government in DAC&FW has decided that interest subvention of 2% per annum will be made available to banks for first three years/entire period (subject to a maximum of five years) on the restructured loan amount, and in all such cases the benefit of prompt repayment incentive at 3% per annum shall also be provided to the affected farmers. The grant of such benefits in cases of severe natural calamities shall, however, be decided by a High Level Committee (HLC) based on the recommendation of Inter-Ministerial Central Team (IMCT) and Sub Committee of National Executive Committee (SC-NEC).

The State Level Bankers’ Committee (SLBC), Maharashtra has reported that they are extending relief measures to the farmers of drought affected part of Maharashtra including Vidarbha and Marathwada regions, as per the guidelines of RBI.

Bank wise details of crop loan accounts restructured, as on 30.04.2019, in Kharif-2018, as reported by SLBC Maharashtra, is given at Annexure.

This was stated by Smt. Nirmala Sitharaman, Union Minister of Finance & Corporate Affairs in a written reply to a question in Rajya Sabha

Restructured Crop loan Accounts-Bank wise (Kharif - 2018 )

(Position as of 30.04.2019)

Numbers of Account (A/c) in Actual Amount (Amt.) in Lakhs

Sr. No.	Bank Name	Total No. of Crop Loan A/c and Amount  Restructured
		A/c	Amt.
1	Allahabad Bank	0	0
2	Andhra Bank	125	100
3	Bank of Baroda	0	0
4	Bank of India	0	0
5	Bank of Maharashtra	398	832
6	Canara Bank	0	0
7	Central Bank of India	0	0
8	Corporation Bank	0	0
9	Indian Bank	0	0
10	Indian Overseas Bank	951	5172
11	Oriental Bank of Commerce	0	0
12	Punjab & Sind Bank	0	0
13	Punjab National Bank	0	0
14	State Bank of India	0	0
15	Syndicate Bank	0	0
16	UCO Bank	0	0
17	Union Bank of India	0	0
18	United Bank of India	0	0
	Sub Total PSBs	1474	6104
19	Axis Bank	726	2689
20	Bandhan Bank Ltd.	0	0
21	Development Credit Bank	0	0
22	Federal Bank	0	0
23	HDFC Bank	8538	6276
24	ICICI Bank	0	0
25	IDBI Bank	5	17
26	IDFC First Bank	0	0
27	IndusInd Bank Ltd.	24	143
28	Karnataka Bank Ltd.	0	0
29	Kotak Mahindra Bank	0	0
30	Ratnakar Bank	0	0
31	Yes Bank Ltd.	0	0
	Sub Total Pvt Sec Banks	9293	9126
	Sub Total Small Finance Banks	0	0
A	Total Commercial Banks	10767	15230
32	Maharashtra  Gramin Bank	76	69
33	Vidarbha Konkan Gramin Bank	4	3
B	Sub Total Gramin Banks	80	72
34	M.S.Coop. / DCC Banks	0	0
35	MSCARD	0	0
C	Sub Total Co.Op Banks	0	0
36	Subhadra Local Area Bank Ltd.	0	0
37	Other Banks	0	0
D	Sub Total Other Banks	0	0
	Grand Total (A + B + C+ D)	10847	15302

             Source:    SLBC, Maharashtra

 

Relief measures for farmers: automatic loan restructuring and interest subvention after declared natural calamities, with relaxed collateral norms. Relief measures automatically activate on district declarations of natural calamity when crop loss meets the reduced 33% threshold, requiring lending institutions to restructure/reschedule crop and term loans, provide fresh credit, grant moratoria, relax security and margin norms, and not demand additional collateral; the DAC&FW interest subvention scheme provides 2% per annum to banks and a 3% prompt repayment incentive to farmers, with subvention on restructured loans continuing for the first year and potentially extended for severe calamities subject to central assessment and High Level Committee approval.