Lok Sabha Question No. 1697 (UNSTARRED), answered on 2018-03-06
Subject: Funds to Cooperative Banks
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: ARJUNLAL MEENA

O.I.H

## GOVERNMENT OF INDIA MINISTRY OF AGRICULTURE AND FARMERS WELFARE DEPARTMENT OF AGRICULTURE, COOPERATION AND FARMERS WELFARE

## LOK  SABHA UNSTARRED QUESTION NO.1697

TO BE ANSWERED ON THE 6 TH  March, 2018

## FUNDS TO COOPERATIVE BANKS

1697.   SHRI ARJUN LAL MEENA:

Will the Minister of AGRICULTURE AND FARMERS WELFARE कृ ष एवं कसान कयाण मंी be pleased to state:

- (a) whether  the  Government  proposes  to  provide  funds  equal  to  the  75  per  cent  of  the interest grant to the cooperative banks at the beginning of the financial year calculated on the basis of the data of the last financial year or to keep funds equal to 75 per cent of the interest grant as interest free revolving fund for the cooperative banks;
- (b) if so, the details thereof; and
- (c) if not, the reasons therefor?

## ANSWER

MINISTER OF STATE IN THE MINISTRY OF AGRICULTURE AND FARMERS WELFARE

कृ ष एवं कसान कयाण मंालय म राय मंी (SHRI  PARSHOTTAM  RUPALA)

- (a):    No, Madam.
- (b):    Does not arise.

(c): The Government since 2006-7 has been implementing the Interest Subvention Scheme (ISS),  under  which  short  term  crop  loans  upto  Rs.3.00  lakh  are  provided  to  farmers  at subvented interest rate of 7% per annum. Further, the farmers on prompt repayment of crop loans on or before the due date are also provided 3% additional interest subvention Thus, in case of prompt payee farmers the short term crop loans are provided at an effective interest rate of 4% per annum.

In  addition,  State  Governments  of  Andhra  Pradesh,  Arunachal  Pradesh,  Chhatisgarh, Gujrat, Haryana, Kerala, Madhya Pradesh, Rajasthan,  and Telengana, provide interest subsidy to Cooperative Structure in the State to enable these institutions to lend short term crop loans to farmers  at 0% rate of interest.   Similarly, in the State Governments of Maharastra, Odisha and Union  Territory  of  Puducherry,  the  short  term  crop  loans  through  Cooperative  Structure  are provided to farmers at effective interest rate of 1%.

The National Bank for Agriculture and Rural Development (NABARD) guidelines stipulate that 'in order to enable the Government of India to provide 3% interest subvention to farmers for prompt repayment, the banks should first credit the eligible amount of 3% interest subvention to

-2- the farmer's crop loan account and thereafter seek reimbursement. The banks may submit their claims on a half yearly basis (as on 30 th September, 2017 and 31 st March, 2018) or on annual basis'.  Accordingly, 3% Prompt Repayment Incentive (PRI) on timely repayment of short term crop  loans  is  made  available  to  farmers  first  by  the  banks  and  thereafter,  they  submit  their audited claims to NABARD for reimbursement by Government of India.

In  view  of  the  present  arrangement  for  settlement  of  claims  under  the  Scheme,  at present, it is not possible to provide funds equal to the 75 per cent of the interest grant to the cooperative banks at the beginning of the financial year or to keep funds equal to 75 per cent of the interest grant as interest free revolving fund for the cooperative banks

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