Interest Subvention and Prompt Repayment Incentive for Short Term Loans for extended period on account of Covid-19

RBI/2019-20/250
FIDD.CO.FSD.BC.No.25/05.02.001/2019-20

June 4, 2020

The Chairman / Managing Director & CEOs
All Public & Private Sector Scheduled Commercial Banks

Madam/Dear Sir,

Interest Subvention (IS) and Prompt Repayment Incentive (PRI) for Short Term Loans for Agriculture including Animal Husbandry, Dairy and Fisheries for extended period on account of Covid-19

Please refer to our circular FIDD.CO.FSD.BC.No.24/05.02.001/2019-20 dated April 21, 2020 advising banks on the Governments’ decision to continue the availability of 2% IS and 3% PRI to farmers for the extended period of repayment upto May 31, 2020 or date of repayment, whichever is earlier.

2. In view of the extension of lockdown and continuing disruption on account of COVID-19, the RBI vide circular dated May 23, 2020 has permitted all lending institutions to extend moratorium by another three months, i.e., upto August 31, 2020. In order to ensure that farmers do not pay higher interest during the extended moratorium period, the Government has decided to continue the availability of 2% IS and 3% PRI to farmers for the extended period of repayment upto August 31, 2020 or date of repayment, whichever is earlier. This benefit will be applicable to all short term loans for Agriculture and Animal Husbandry, Dairy and Fisheries (AHDF) upto ₹3 lakh per farmer (upto ₹2 lakh for AHDF farmers).

3. All other terms and conditions remained unchanged.

Yours faithfully,

(Sonali Sen Gupta)
Chief General Manager