Press Information Bureau
Government of India
Ministry of Finance
13-December-2011 16:49 IST
Credit to Farmers

The Government of India has taken several measures for the availability of credit to farmers through banks. These include:

(i)           The Interest Subvention Scheme which is being implemented by the Government of India since 2006-07 to make short-term crop loans upto Rs. 3 lakh for a period of one year available to farmers at the interest rate of 7 percent per annum. The Government of India has since 2009-10 been providing additional interest subvention to prompt payees farmers, i.e., those who repay their loan in time. The additional subvention was 1% in 2009-10 and 2% in 2010-11. This is being increased to 3% in 2011-12.

(ii)   The Agricultural Debt Waiver and Debt Relief Scheme (ADWDRS), 2008   has de-clogged the lines of credit that       were clogged due to the debt burden on the farmers.

(iii)  Banks have  been advised to dispense with the requirement  of  “no dues” certificates for  small loans up to  Rs.50,000 to small and marginal farmers,  share-croppers and the like and instead obtain  a    self-declaration    from  the borrower.

(iv)  RBI has advised banks to waive  margin/security  requirements for agricultural loans upto Rs 1,00,000.

(v)  To extend the reach of banking facilities   to the rural hinterland, banks have indentified approximately 73,000 villages with population of more than 2000 to provide    banking facilities by March, 2012. As per reports received from State Level Bankers Committee    (SLBC) Convener Banks, over 45,000 such villages have been covered upto October, 2011.

(vi) General   permission has been  granted   to domestic Scheduled Commercial Banks   (other than RRBs)  to open branches/mobile branches/Administrative Offices/CPCs (Service Branches), (i) in Tier 2 to Tier 6 centres (with population upto 99,999) and (ii) in rural, semi urban and urban centres of the   North-Eastern States and    Sikkim, subject to reporting.  RBI has advised banks that while preparing their Annual Branch Expansion Plan (ABEP), the Banks should allocate at least 25 percent of the total   number of branches proposed to be opened during a year in unbanked rural (Tier 5 and Tier 6) centres.

The steps taken by the Govt of India to make Kisan Credit Cards (KCC) popular are as under:

·         Banks have been advised to cover all eligible farmers under KCC scheme.

·         KCC holders have been covered under Personal Accident Insurance Scheme (PAIS) against accidental death or permanent disability, upto maximum amount of Rs. 50000/- and Rs. 25000/- respectively.  The premium burden will be shared by the card issuing institutions and the borrower in the ratio of 2:1.

·         NABARD has issued instructions to Co-operative Banks and RRBs to issue KCC to tenant farmers/ share croppers/oral lessee/Joint liability groups.

The details of agriculture credit flow and number of loan accounts financed during the year 2009-10, 2010-11 and     2011-12 (upto 30th September) are as under:


Agriculture credit flow (Rs. In crore)

Total No. of farm loan a/cs financed (in lakh)










*Achievement upto 30th September, 2011.

This information was given by the Minister of State for Finance, Shri   Namo Narain Meena in written reply to a question in the Rajya  Sabha today.