Date: 2024-08-06Category: Not ApplicableState: Union GovernmentCountry: India
Modified Interest Subvention Scheme for Short Term Loans for Agriculture and Allied Activities availed through Kisan Credit Card (KCC) during the financial year 2024-25
Executive Summary:
The Reserve Bank of India (RBI) announces the continuation of the Modified Interest Subvention Scheme (MISS) for the financial year 2024-25, providing interest subvention on short-term loans for agriculture and allied activities availed through Kisan Credit Cards (KCC). The scheme offers concessional interest rates to farmers and requires banks to report granular data on beneficiaries via the Kisan Rin Portal (KRP). Banks must upload claims by June 30, 2025.
Key Points / Main Content:
Interest Subvention Scheme:
* MISS continues for FY 2024-25, providing interest subvention on short-term loans up to ₹3 lakh to farmers via KCC for agriculture and allied activities.
* Subvention applies to Public Sector Banks (PSBs) and Private Sector Banks (rural and semi-urban branches only), Small Finance Banks (SFBs), and computerized Primary Agriculture Cooperative Societies (PACS) ceded with Scheduled Commercial Banks (SCBs) using their own resources.
* Interest subvention is calculated from the date of disbursement to the date of repayment or the loan due date, whichever is earlier, for a maximum of one year.
Interest Rates and Subvention:
* Lending rate to farmers is 7% per annum.
* Interest subvention to lending institutions is 1.50%.
* An additional 3% subvention is provided to farmers for timely repayment, effectively reducing the interest rate to 4% per annum for prompt payers. This benefit is not applicable for loans repaid after one year.
Loan Limits and Sub-Limits:
* Interest subvention and prompt repayment incentive are available on an overall limit of ₹3 lakh per annum.
* A maximum sub-limit of ₹2 lakh applies to farmers involved only in animal husbandry, dairy, fisheries, bee keeping etc.
* The crop loan component takes priority for interest subvention, with the residual amount considered for allied activities, subject to the cap.
Additional Provisions:
* Interest subvention is available to small and marginal farmers for up to six months post-harvest against negotiable warehouse receipts.
* For farmers affected by natural calamities, the applicable interest subvention rate is available for the first year on restructured loans; severe natural calamities may extend this benefit up to five years with approval from a High Level Committee.
* Aadhar linkage is mandatory for availing short-term loans under MISS in 2024-25.
Reporting and Claims:
* Banks must capture granular data of individual farmer beneficiaries and report it on the Kisan Rin Portal (KRP).
* Claims for computerized PACS ceded with SCBs must be uploaded separately, certified by the banks' Statutory Auditors.
* Banks must upload claims/additional claims, certified by their Statutory Auditors, on the KRP module by June 30, 2025.
Impact Analysis:
Banks:
* Impact: Banks need to implement the interest subvention scheme, manage loan disbursements and repayments according to the guidelines, and ensure accurate reporting.
* Action Required: Capture and report category-wise data on the KRP, upload claims by June 30, 2025, and ensure compliance with Aadhar linkage requirements.
Farmers:
* Impact: Farmers benefit from reduced interest rates on short-term loans for agriculture and allied activities, encouraging timely repayment and reducing the burden of borrowing.
* Action Required: Ensure Aadhar linkage for availing loans and strive for timely repayment to benefit from the additional interest subvention.
NABARD:
* Impact: Ensure no refinance has been availed for loans on which interest subvention/prompt repayment incentive is being claimed.
* Action Required: Certification from banks Statutory Auditors must be provided to ensure the above.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the banking system.
Modified Interest Subvention Scheme: A Government of India scheme to provide interest subvention on short term loans for agriculture and allied activities.
Kisan Credit Card: A credit card scheme providing short-term credit to farmers.
Financial Year 2024-25: The financial year for which the Modified Interest Subvention Scheme is being continued.
Public Sector Banks: Banks in India that are owned by the government.
Private Sector Banks: Banks in India that are privately owned.
Small Finance Banks: A type of bank in India that caters to the financial needs of small businesses, farmers, and other unorganized sector entities.
NABARD: National Bank for Agriculture and Rural Development, an apex development finance institution in India.
भारतीय �रज़व र् बकैं
______________________ RESERVE BANK OF INDIA________________________
www.rbi.org.in
RBI/2024-25/59
FIDD.CO.FSD.BC.No.8/05.02.001/2024-25 August 06, 2024
The Chairman/Managing Director/Chief Executive Officer
All Public Sector Banks, Private Sector Banks and
Small Finance Banks
Madam/Dear Sir,
Modified Interest Subvention Scheme for Short Term Loans for Agriculture and
Allied Activities availed through Kisan Credit Card (KCC) during the financial year
2024-25
Please refer to our circular FIDD.CO.FSD.BC.No.13/05.02.001/2022-23 dated November
23, 2022 conveying the decision of the Government of India for continuation of the
Modified Interest Subvention Scheme for short term loans for agriculture and allied
activities for the years 2022-23 and 2023-24.
2. In this regard, it is advised that Government of India has approved the continuation of
the Modified Interest Subvention Scheme (MISS) for the financial year 2024-25 with the
following stipulations:
(i) In order to provide short term crop loans and short term loans for allied activities
including animal husbandry, dairy, fisheries, bee keeping etc. upto an overall limit
of ₹3 lakh to farmers through KCC at concessional interest rate during the year
2024-25, it has been decided to provide interest subvention to lending institutions
िवत् तीय समावशे न और िवकास िवभाग,क��ीय कायार्लय, 10वीमंिजल, क��ीय कायार्लय भवन, पो.बा.सं.10014, मुंबई 400 001
टेलीफोन /Tel. No: 91-22-22661000 फैक्स/Fax No: 91-22-22621011/22610948/22610943
ई-मेल/ Email ID:cgmincfidd@rbi.org.in
Financial Inclusion & Development Department, Central Office, 10thFloor, C.O. Building, Post Box No.10014, Mumbai 400 001
�हदंी आसान है, इसका �योग बढ़ाइये
“चेतावनी�रज़व र्बक� �ारा - :मेल, डाक, एसएमएस या फोन कॉल के ज�रए �कसी क� भी व्य ि�गत जानकारी जसै ेबक� के खात ेका ब्य ौरा, पासवडर् आ�द नह� मागंी
जाती ह।ै यह धन रखन ेया दने ेका �स्त ाव भी नह� करता ह।ै ऐस े�स्त ाव� का �कसी भी तरीके स ेजवाब मत दीिजए।"
Caution: RBI never sends mails, SMSs or makes calls asking for personal information like bank account details, passwords, etc. It never keeps or
offers funds to anyone. Please do not respond in any manner to such offers.viz. Public Sector Banks (PSBs) and Private Sector Banks (in respect of loans
given by their rural and semi-urban branches only), Small Finance Banks (SFBs)
and computerized Primary Agriculture Cooperative Societies (PACS) ceded with
Scheduled Commercial Banks (SCBs), on use of their own resources. This
interest subvention will be calculated on the loan amount from the date of
disbursement/drawal up to the date of actual repayment of the loan by the farmer
or up to the due date of the loan fixed by the banks, whichever is earlier, subject
to a maximum period of one year. The applicable lending rate to farmers and the
rate of interest subvention for the financial year 2024-25 will be as follows:
Financial Year Lending rate to farmers Rate of Interest
Subvention to Lending
Institutions
2024-25 7% 1.50%
(ii) An additional interest subvention of 3% per annum will be provided to such of
those farmers repaying in time, i.e., from the date of disbursement of the loan/s
upto the actual date of repayment or upto the due date fixed by the banks for
repayment of such loan/s, whichever is earlier, subject to a maximum period of
one year from the date of disbursement. This also implies that the farmers
repaying promptly as above would get short term crop loans and/or short term
loans for allied activities including animal husbandry, dairy, fisheries, bee keeping
etc. @ 4% per annum during the financial year 2024-25. This benefit would not
accrue to those farmers who repay their agri loans after one year of availing such
loans.
(iii) Interest subvention and prompt repayment incentive benefits on short term crop
loans and short term loans for allied activities will be available on an overall limit
of ₹3 lakh per annum subject to a maximum sub-limit of ₹2 lakh per farmer in
respect of those farmers involved only in activities related to animal husbandry,
dairy, fisheries, bee keeping etc. The limit for crop loan component will take
priority for interest subvention and prompt repayment incentive benefits and the
residual amount will be considered towards allied activities including animal
2husbandry, dairy, fisheries, bee keeping etc. subject to the cap as mentioned
above. (Illustrations)
(iv) In order to discourage distress sale by farmers and to encourage them to store
their produce in warehouses, the benefit of interest subvention under KCC will be
available to small and marginal farmers for a further period of upto six months
post the harvest of the crop against negotiable warehouse receipts on the produce
stored in warehouses accredited with Warehousing Development Regulatory
Authority (WDRA), at the same rate as applicable to the crop loan.
(v) To provide relief to farmers affected by natural calamities, the applicable rate of
interest subvention for that year will be made available to banks for the first year
on the restructured loan amount. Such restructured loans will attract normal rate
of interest from the second year onwards.
(vi) However, to provide relief to farmers affected due to severe natural calamities,
the applicable rate of interest subvention for that year will be made available to
banks for first three years/entire period (subject to a maximum of five years) on
the restructured loan amount. Further, in all such cases, the benefit of prompt
repayment incentive @3% per annum shall also be provided to the affected
farmers. The grant of such benefit in cases of severe natural calamities shall,
however, be decided by a High Level Committee (HLC) based on the
recommendations of the Inter-Ministerial Central Team (IMCT) and Sub
Committee of National Executive Committee (SC-NEC).
(vii) To ensure hassle-free benefits to farmers under the MISS, Aadhar linkage would
continue to be mandatory for availing the above-mentioned short-term loans in
2024-25.
3. Banks are advised to capture the requisite category wise granular data of individual
farmer beneficiaries under the scheme and report the same on Kisan Rin Portal (KRP) to
settle the audited MISS claims for the year 2024-25.
34. The claims in respect of computerized PACS ceded with SCBs may be uploaded
separately by the respective banks, with the certification that interest subvention/prompt
repayment incentive is being claimed on loans for which no refinance has been availed
from NABARD, duly certified by the banks’ Statutory Auditors, through KRP module.
5. Banks are advised to take necessary action to upload the claims/additional claims duly
certified by their Statutory Auditors as true and correct, on KRP module for FY 2024-25
latest by June 30, 2025.
Yours faithfully,
(R. Giridharan)
Chief General Manager
4Illustrations
Illustration I
Overall KCC limit - ₹2.5 lakh
Limit under Crop loan - ₹1.5 lakh
Sub-limit under Animal Husbandry and/or Dairy and/or Bee keeping and/or Fisheries – ₹1 lakh
IS and PRI benefit will be available on overall ₹2.5 lakh i.e.
• ₹1.5 lakh -Crop loan + ₹1 lakh- Animal Husbandry and/or Dairy and/or Bee keeping and/or
Fisheries
Illustration II
Overall KCC limit - ₹3 lakh
Limit under Crop loan - ₹0.5 lakh
Sub-limit under Animal Husbandry and/or Dairy and/or Bee keeping and/or Fisheries – ₹2.5 lakh
IS and PRI benefit will be available on overall ₹2.5 lakh i.e.
• ₹0.5 lakh - Crop loan + ₹2 lakh - Animal Husbandry and/or Dairy and/or Bee keeping and/or
Fisheries
Illustration III
Overall KCC limit - ₹4 lakh
Limit under Crop loan - ₹1.75 lakh
Sub-limit under Animal Husbandry and/or Dairy and/or Bee keeping and/or Fisheries– ₹2.25 lakh
IS and PRI benefit will be available on overall ₹3 lakh i.e.
• ₹1.75 lakh -Crop loan + ₹1.25 lakh - Animal Husbandry and/or Dairy and/or Bee keeping and/or
Fisheries
Illustration IV
Overall KCC limit - ₹4.5 lakh
Limit under Crop loan - ₹2 lakh
Sub-limit under Animal Husbandry and/or Dairy and/or Bee keeping and/or Fisheries – ₹2.5 lakh
IS and PRI benefit will be available on overall ₹3 lakh i.e.
• ₹2 lakh - Crop loan + ₹1 lakh - Animal Husbandry and/or Dairy and/or Bee keeping and/or
Fisheries
Illustration V
Overall KCC limit - ₹4 lakh
Limit under Crop loan - ₹3.15 lakh
Sub-limit under Animal Husbandry and/or Dairy and/or Bee keeping and/or Fisheries – ₹0.85 lakh
IS and PRI benefit will be available on overall ₹3 lakh for crop loan component only
*******
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