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18 Jan 2022
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Cabinet approves short term loans repayment for agriculture, allied activities till August 31

Cabinet approves short term loans repayment for agriculture, allied activities till August 31

The Union Cabinet chaired by the Prime Minister, Narendra Modi has given its approval to extend repayment date up to 31 August 2020 for Standard Short-Term loans up to INR 3 lakh advanced for agriculture and allied activities by banks.

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NEW DELHI, 1 June 2020: The Union Cabinet chaired by the Prime Minister, Narendra Modi has given its approval to extend repayment date up to 31 August 2020 for Standard Short-Term loans up to INR 3 lakh advanced for agriculture and allied activities by banks.

Short term loans which have become due or shall become due between 1 March, 2020 and 31 August, 2020 with continued benefit of 2 percent Interest Subvention (IS) to Banks and 3 percent Prompt Repayment Incentive (PRI) to farmers, the agriculture ministry said in a statemet.

Extension of repayment date up to 31 August 2020 for Standard Short-Term loans up to INR 3 lakh for agriculture and allied activities by banks falling due between 1st March, 2020 and 31st August, 2020 with continued benefit of 2 percent IS to Banks and 3 percent PRI to farmers, shall help the farmers to repay/renew such loans upto the extended repayment date of 31 August 2020 at 4 percent p.a., interest without attracting any penalty and thus help them in avoiding travelling to banks for such renewal during this COVID pandemic period.

Government is providing concessional Standard Short-Term Agri-loans to farmers through banks with 2 percent p.a, interest subvention to banks and 3 percent additional benefit on timely repayment to farmers thus providing loans up to INR 3 lakh at 4 percent p.a. interest on timely repayment.

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.


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