Farmers to be charged 10.35% interest for loan conversion

Tribune News Service

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Hisar, June 6

Reacting to the news report about costly pay-off offer to farmers, the state government has clarified that the existing loan will be treated as a fresh medium-term loan and farmers will be charged interest at 10.35 per cent.

The official release said the recovery in villages where crop loss is 50 per cent or more due to natural calamities had been totally suspended by the cooperative banks. Farmers have been told that their crop loans can be converted into medium-term loans for three years. There would be no penalty on interest on the conversion of loan to medium term. Moreover, these farmers would be eligible to avail fresh short-term loan for sowing their kharif crops this year.

A fresh short-term loan will be provided interest subvention at 3 p.a. by the Centre and at 4 per cent by the state government on the timely repayment of the kharif loan, thus paving the way for distressed farmers to avail ST crop loan for kharif at 0 per cent interest rate if they repay it on time.

In fact, the farmer who opts for re-scheduling of his loan is treated as a timely payer and no interest is charged till the date of conversion, i.e up till June 15, his loans will be rescheduled and there will be no penalty. “Crop loan advanced during rabi 2014-15 will be converted into medium-term loan at 10.35 per cent p.a. and not 12.

Furthermore, farmers will be able to avail fresh loan for raising their kharif crops and the same will be issued at 0 per cent interest if paid on due date i.e. February 15, 2016.

The state government is committed to providing short-term crop loans to the farmers through cooperative banks at 0 per cent rate of interest. The government has also, for the first time, announced the scheme, whereby individual farmers, whose crops have suffered more them 50 per cent loss can also avail the benefit of conversion of their short-term loan into a medium one, it said.