**Summary:**
The Reserve Bank of India (RBI) issued a directive (FIDD.CO.FSD.BC.No.178505.02.001/2019-20) on February 26, 2020, to all Public and Private Sector Scheduled Commercial Banks (excluding Regional Rural Banks and Small Finance Banks) regarding Short Term Crop Loans eligible for the Interest Subvention Scheme (ISS) and Prompt Repayment Incentive (PRI) through Kisan Credit Card (KCC).
Effective April 1, 2020, the Ministry of Agriculture & Farmers Welfare has mandated that all Short Term Crop Loans eligible for ISS and PRI must be extended exclusively through KCC. Consequently, KCC becomes a prerequisite for farmers to claim ISS and PRI benefits. Banks are instructed to ensure compliance with this requirement. Existing Short Term Crop Loans not extended through KCC must be converted to KCC loans by March 31, 2020. Reimbursement of interest subvention for Short Term Crop Loans through non-KCC accounts will not be considered beyond March 31, 2020.
For further information, contact Sonali Sen Gupta, Chief General Manager, Reserve Bank of India.
Key Entities Referenced
Reserve Bank of India: The central bank of India and issuer of this notification.
Interest Subvention Scheme: A government scheme providing interest subvention on short term crop loans.
Prompt Repayment Incentive: An incentive offered for prompt repayment of loans.
Kisan Credit Card: A credit card scheme providing short-term credit to farmers.
Ministry of Agriculture & Farmers Welfare: The Indian government ministry responsible for agriculture and farmers' welfare.
Short Term Crop Loans: Loans provided to farmers for financing crop production for a short duration.
Sonali Sen Gupta: Chief General Manager at Reserve Bank of India, signatory of the notification.
Regional Rural Banks: Scheduled Commercial Banks which are excluded from this notification.
भारतीय �रज़व र् बक�
RESERVE BANK OF INDIA
www.rbi.org.in
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RBI/2019-20/166
FIDD.CO.FSD.BC.No.1785/05.02.001/2019-20 February 26, 2020
The Chairman/Managing Director/Executive Officer
All Public & Private Sector Scheduled Commercial Banks
(Excluding Regional Rural Banks and Small Finance Banks)
Madam/Sir,
Short Term Crop Loans eligible for Interest Subvention Scheme (ISS) and Prompt
Repayment Incentive (PRI) through KCC
Ministry of Agriculture & Farmers Welfare vide their Office Memorandum, No. F. 1-
20/2018-Credit-I, dated January 23, 2020 has advised that Short Term Crop Loans
eligible for Interest Subvention Scheme (ISS) and Prompt Repayment Incentive (PRI)
should be extended only through KCC thus making KCC a prerequisite for claiming
Interest Subvention (IS) and Prompt Repayment Incentive (PRI) by farmers w.e.f. April 1,
2020.
2. In view of this, banks are advised to ensure that all Short Term Crop Loans eligible for
Interest Subvention (IS) and Prompt Repayment Incentive (PRI) benefit are extended only
through KCC w.e.f. April 1, 2020. The existing Short Term Crop Loans which are not
extended through KCC shall be converted to KCC loans by March 31, 2020.
3. Accordingly, reimbursement of interest subvention for Short Term Crop Loans through
non-KCC accounts shall not be considered beyond March 31, 2020.
Yours faithfully,
(Sonali Sen Gupta)
Chief General Manager