Reacting to the news of restoration of the interest subvention, Vidyadhar Anaskar, Chairman of Administrative Board of MSC Bank hailed the Cabinet decision and thanked Union Home Minister Amit Shah. Presided by the Prime Minister, the Union Cabinet took a decision to this effect on Wednesday.
“Earlier the Union Government was giving 2 percent interest subvention on short term agriculture loans but now it has been reduced to 1.5 percent. But I urged the state government or state cooperative banks to bear the remaining half percent, which will help district central cooperative banks in a big way”, Anaskar suggested.
In his comment, Satara DCCB CEO Rajendra Sarkale added that finally the Union Government has fulfilled our demand. It will help DCCBs to reduce the extra burden. We are happy that the government has restored it in the interest of the cooperative movement. We are ready to bear the remaining half percent.
Earlier, talking to Indian Cooperative NAFSCOB President Ravinder Rao said, “On 12th August 2022, from the podium we demanded the restoration of the interest subvention in the presence of Union Minister Amit Shah and taking the matter seriously, the GOI has done the same in the span of four days. We welcome the decision”.
“We thank Amit Shahji, our Cooperation Minister for understanding the plight of cooperative societies. It will not only help banks but also PACCs in a big way. It will reduce the extra burden on banks”, he added while talking to Indian Cooperative on the phone.
It bears recalling that the Union Cabinet, chaired by the Prime Minister Narendra Modi restored Interest Subvention on short term agriculture loans to 1.5% for all financial institutions in a Cabinet meeting on Wednesday.
Interest Subvention of 1.5% will be provided to lending institutions (Public Sector Banks, Private Sector Bank, Small Finance Banks, Regional Rural Banks, Cooperative Banks and Computerized PACS directly ceded with commercial banks) for the financial year 2022-23 to 2024-25 for lending short term agri-loans upto Rs 3 lakh to the farmers.
This increase in Interest Subvention support requires additional budgetary provisions of Rs 34,856 crore for the period of 2022-23 to 2024-25 under the scheme.
According to PIB’s press release, “Increase in Interest Subvention will ensure sustainability of credit flow in the agriculture sector as well as ensure financial health and viability of the lending institutions especially Regional Rural Banks & Cooperative Banks, ensuring adequate agriculture credit in rural economy”.