Govt nudges co-op banks to go soft on farm-loan

Madhya Pradesh government is likely to offer 10 percent discount on the ‘kind’ component of farm loans given by state cooperative banks to farmers in the state, according to Hindustan Times.

Sources say the recent spate of farmers’ suicides may spur the government into its implementation. The government is already offering loans to farmers at zero interest rate, sources say.

Farm loans have a 75% cash component and a 25% kind component against which farmers can get seeds and fertilizer on credit. About 28 lakh farmers across Madhya Pradesh would benefit from the scheme.

Following the implementation of the scheme , , farmers would return 10% less than the due amount for repayment of the kind component. This would cost the exchequer about Rs 1,000 crore over the next three years.

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