RBI/2006-2007/391
RPCD.No.PLFS.BC.
90/05.04.02/2006-07
May 10, 2007
The
Chairman/Managing Director
All Public Sector Banks
Dear
Sir,
Union Budget – 2007-08
– Proposal for continuation of 2 per cent interest subvention scheme for short-term
crop loans in 2007-08
As
you are aware, the Hon’ble Finance Minister, in his Budget Speech (paragraph 46)
for 2007-08 had announced as follows:
" The two
percent interest subvention scheme for short-term crop loans will continue in
2007-08 ."
2..In pursuance of this announcement,
Government will provide interest subvention of 2% p.a. to Public Sector Banks
in respect of short-term production credit up to Rs.3 lakh provided to farmers.
This amount of subvention will be calculated on the amount of the crop loan disbursed
from the date of disbursement/drawal up to the date of payment or up to the date
beyond which the outstanding loan becomes overdue i.e. March 31, 2008 for Kharif
and June 30, 2008 for Rabi, respectively, whichever is earlier. This subvention
will be available to Public Sector Banks on the condition that they make available
short-term credit at ground level at 7% p.a.
3 . Banks
are advised to immediately, submit their estimates of short-term production
credit to farmers up to Rs.3 lakh for Kharif and Rabi 2007-08 (separately) to
enable us to provide Government with an estimate of the likely amount of subvention.
Please note that the estimates should be realistic in nature.
4.
Banks are also advised as under :-
i) In order to enable
Government to provide subvention, banks are required to submit their claims on
a half-yearly basis as at September 30, 2007 and March 31, 2008, within
one month from the end of the respective half years. The format for the purpose
is enclosed.
ii) The claim for the half-year ending March
31, 2008 should also accompany a Statutory Auditor’s certificate certifying that
the claims for subvention of Rs._________(amounts claimed for each of the half-years
to be specified) for the entire year ended March 31, 2008 as true and correct.
Final settlement of the claims will be done only on receipt of this certificate.
iii)
Claims may be submitted to the Chief General Manager-in-Charge, Rural Planning
and Credit Department, Reserve Bank of India, Central Office, Shahid Bhagat Singh
Road, Fort, Mumbai – 400 001.
5.
In case of RRBs and co-operatives, a separate circular will be issued by NABARD.
Yours faithfully,
( A.K.Pandey)
General Manager