Maharashtra CM Uddhav Thackeray bats for restoration of interest subvention scheme for short-term loans to protect farmers’ interest

Thackeray said the Centre had made 2% interest subvention available to the cooperative and nationalized banks which enabled them to disburse short-term crop loan at concessional interest rate

Sanjay JogUpdated: Monday, May 30, 2022, 06:16 PM IST
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Maharashtra CM Uddhav Thackeray | Twitter/CMO

Maharashtra Chief Minister Uddhav Thackeray in a letter to the union agriculture minister Narendra Singh Tomar has urged to continue the interest subvention scheme in respect of District Central Cooperative Banks (DCCBs) to protect the interest of the farmers. ‘’The interest subvention facility which was available till the year 2021-22 may be continued further. There is immediate need to review the decision of withdrawal of interest subvention and therefore sincerely urge the Government of India that to protect the interest of the farmers it should be continued. I would be grateful if the Ministry of Agriculture and Farmers Welfare reconsiders the decision and restores 2% interest subvention in the vital interest of the farmers,’’ said Thackeray.

Thackeray referred to the circular issued by the National Bank for Agriculture and Rural Development (NABARD) on March 29, 2022, saying that the 2% interest subvention scheme for short-term loans has been modified and the benefit of this subvention would not be available from 2022-23. ‘’This will have an adverse impact on the financial position of the cooperative banks and in turn it will have a serious negative impact on the distribution of short-term crop loans to the farmers in the state,’’ he said.

Thackeray said the Centre had made 2% interest subvention available to the cooperative and nationalized banks which enabled them to disburse short-term crop loan at concessional interest rate. ‘’This interest subvention was especially helpful to the cooperative banks which have larger connect to the farmers,’’ he noted.

CM said at present cooperative banks/DCCBs in the state are offering interest rate on deposits ranging from 3 to 7.55% per annum. These banks are also required to maintain statutory reserves (CRR and SLR) and other financial parameters as per RBI guidelines. ‘’Considering these factors. DCCBs in the state find it difficult to lend to farmers at 7% interest without interest subvention from the Central Government. This issue was discussed at the state level bankers’ committee (SLBC) on May 30, 2022 where it was unanimously resolved to request the Government of India for restoration of the interest subvention scheme,’’ he added.

Meanwhile, Thackeray chaired the state level bankers’ committee to discuss annual credit disbursement plans by banks in the state especially ahead of the commencement of kharif season.

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