Press Information Bureau

Government of India

Ministry of Finance

11-May-2012 17:45 IST

Loan From Land Development Bank

The Interest Subvention Scheme is being implemented by the Government of India since 2006-07 to make short-term crop loans upto Rs.3 lakhs for a period of one year available to farmers at the interest rate of 7 per cent per annum. The Government of India has since 2009-10 been providing additional interest subvention to prompt payee farmers. The additional subvention was 1% in 2009-10, 2% in 2010-11 and 3% in 2011-12. The Government has in the Budget speech of 2012-13 announced continuation of the scheme in 2012-13.

Interest Subvention is provided to Public Sector Banks, Regional Rural Banks and Cooperative Banks. Land Development Banks are not Cooperative Banks as defined in Banking Regulations Act, 1949 and are not covered under the Scheme.

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.

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DSM/SS/Hb

Interest subvention scheme continues, providing concessional short term crop loan rates but excluding land development banks from coverage. The Interest Subvention Scheme subsidises interest on one year short term crop loans to make them available to farmers at a concessional rate, with incremental additional subvention for prompt payers and continuation announced for the next budget year. The scheme is payable to Public Sector Banks, Regional Rural Banks and Cooperative Banks; Land Development Banks are not covered because they are not Cooperative Banks as defined in the banking regulatory framework.