3rd November 2011
Srinagar
Interest Subvention Scheme of Govt. of India Extended to J&K Bank
In a bid to extend cheap loans to the agriculture sector in the J&K State, Jammu & Kashmir Bank can now provide interest subsidy to the farmers under interest subvention scheme of GOI who avail loan facilities under different crop loan schemes of the bank aimed to enhance agriculture production.
The relief to the farmers has come in the wake of the central finance ministry's announcement that "as the J&K Government retains majority stake of 53% in the Jammu and Kashmir Bank, it, can provide subsidised loans to farmers under the Interest Subvention Scheme of the Centre".
Notably, the government of India has been implementing the Interest Subvention Scheme since 2006-07 to ensure that short-term crop loans up to Rs 3 lakh are available to farmers at a concessional interest rate of 7 per cent per annum, irrespective of the prevailing market rate. The scheme is being currently implemented through public sector banks, regional rural banks and cooperative banks only.
It may be mentioned that till now J&K Bank was not eligible to extend the interest subsidy to the farmers availing agriculture loan. But due to timely intervention of Hon'ble Chief Minister, Mr. Omer Abdullah and continued efforts of the Bank, the union finance ministry included J&K Bank in the Interest Subvention Scheme.
"It has therefore been decided that the Interest Subvention Scheme on short-term crop loans will also be applicable for lending done by the bank as long as the Jammu & Kashmir government retains a majority stake in the bank," reads the communiqué of the union finance ministry.
While thanking the union finance ministry and the tremendous support of the state government, Mushtaq Ahmad, J&K Bank Chairman & CEO said, "It is a big boost to the agriculture sector of the state. By allowing us to extend the benefit of the interest subvention scheme to the local farmers, the loans will be available at softer rate of interest. And this will raise our exposure to the sector, as more and more farmers would be taking route of our schemes to explore the untapped potential in the sector."
Notably, benefit of interest subvention would go to those farmers who repay their crop loans on time.
The relief to the farmers has come in the wake of the central finance ministry's announcement that "as the J&K Government retains majority stake of 53% in the Jammu and Kashmir Bank, it, can provide subsidised loans to farmers under the Interest Subvention Scheme of the Centre".
Notably, the government of India has been implementing the Interest Subvention Scheme since 2006-07 to ensure that short-term crop loans up to Rs 3 lakh are available to farmers at a concessional interest rate of 7 per cent per annum, irrespective of the prevailing market rate. The scheme is being currently implemented through public sector banks, regional rural banks and cooperative banks only.
It may be mentioned that till now J&K Bank was not eligible to extend the interest subsidy to the farmers availing agriculture loan. But due to timely intervention of Hon'ble Chief Minister, Mr. Omer Abdullah and continued efforts of the Bank, the union finance ministry included J&K Bank in the Interest Subvention Scheme.
"It has therefore been decided that the Interest Subvention Scheme on short-term crop loans will also be applicable for lending done by the bank as long as the Jammu & Kashmir government retains a majority stake in the bank," reads the communiqué of the union finance ministry.
While thanking the union finance ministry and the tremendous support of the state government, Mushtaq Ahmad, J&K Bank Chairman & CEO said, "It is a big boost to the agriculture sector of the state. By allowing us to extend the benefit of the interest subvention scheme to the local farmers, the loans will be available at softer rate of interest. And this will raise our exposure to the sector, as more and more farmers would be taking route of our schemes to explore the untapped potential in the sector."
Notably, benefit of interest subvention would go to those farmers who repay their crop loans on time.