Reserve Bank of India Directs Banks Linking Aadhaar Mandatory to Avail Crop Loans

The Reserve Bank of India has directed commercial banks to make linking Aadhaar Mandatory for Farmers to avail short-term crop loans in 2017-2018. "Interest Subvention Scheme for Short Term Crop Loans during the year 2017-18" notification was send to all public and private sector scheduled commercial banks by RBI.

Reserve Bank of India Directs Banks Linking Aadhaar Mandatory to Avail Crop Loans

This step has been taken by RBI to ensure hassle-free benefits for farmers under interest subvention scheme, the banks are advised to take Aadhaar and link to respective farmers account in order to avail short term crop loans in 2017-2018.

This development has been made after approval of central government on the implementation of the interest subvention scheme for the year 2017-18 for short-term crop loans up to ₹3 lakh with some stipulations. To provide short-terms crop loans for farmers upto ₹3 lakh at interest rate of 7% per annum during the year 2017-2018, it has been decided to offer interest subvention of 2 percent per annum to lending institutions via Public Sector Banks (PSBs), Private Sector Commercial Banks (in respect of loans given by their rural and semi-urban branches only) on use of their own resources.

The interest subvention of 2 percent will be calculated on the crop load amount from the date of its disbursement, drawl up to the date of actual repayment of the crop loan by the farmer or up to the due date of the loan fixed by the banks whichever is earlier, subject to a maximum period of one year.

An interest subvention of 2 percent per annum will be made available to banks for the first year on the restructured loan amount to provide relief to farmers affected by natural calamities.