Guidelines for Relief to Farmers- 9th March 2006
1. Union Budget Speech envisages grant of interest relief of two percentage points in the interest rate on the principal amount upto Rs 1 lakh on crop loans availed by the farmers for Kharif and Rabi 2005-06. The amount of the relief is required to be credited to the borrower's account before March 31, 2006.
2. It has been decided by Reserve Bank of India that banks may first credit the proposed relief to the farmer's account before March 31, 2006 and thereafter seek reimbursement.
3. Banks may work out the interest relief on the following basis:
(a) All crop loans for Kharif & Rabi disbursed to farmers during the financial year 2005-06 will be eligible for the interest relief of two percentage points. However, where each crop loan exceeds Rs.1 lakh, the interest relief will be applicable on the principal amount up to Rs.1 lakh only.
(b) Interest relief may be calculated at two percentage points, on the amount of the crop loan disbursed from the date of disbursement/drawal up to the date of payment or upto the date beyond which the outstanding loan becomes overdue i.e. 31st March 2006 for Kharif and 30th June 2006 for Rabi, respectively, whichever is earlier.
4. For this purpose, the banks may submit their claims to the Chief General Manager-in-Charge, Rural Planning and Credit Department, Reserve Bank of India, Central Office, Mumbai.
5. It is clarified that banks can also furnish their claims to the Reserve Bank in installments, as convenient to them. Banks will be reimbursed their claims by way of credit to their accounts with RBI within one month of the date of receipt of the claim. The claims submitted by banks shall be subject to audit/RBI inspection subsequently.
6. For audit purposes all claims may be certified by the statutory auditors and certificates submitted before 30th June 2006 to the Chief General Manager-in- Charge, Rural Planning and Credit Department, Reserve Bank of India, Central Office, Mumbai.
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