Kisan Credit Card Loan Interest Rate 2022-2023 and 2023-24: 4% Interest for Timely Repayment

The Reserve Bank of India (RBI) has announced the interest rates for short-term loans up to Rs 3 lakh through Kisan Credit Cards (KCC) for farmers. The interest rate for farmers availing short-term loans through KCC will be 7% for farmers, with an additional interest subsidy of 3% if they repay the loan within one year from the date of disbursement. This brings the effective interest rate down to 4% for farmers who repay their loans promptly.

Key Takeaways:

• The interest rate on short-term loans up to Rs 3 lakh through KCC will be 7% for farmers for FY 2022-23 and FY 2023-24.
• An additional interest subvention of 3% will be provided to farmers who repay the loan in time, making the effective interest rate 4%.
• The interest subvention benefit will not accrue to farmers who repay their loans after one year of availing the loan.
• The interest subvention will be calculated on the loan amount from the date of disbursement/withdrawal up to the date of actual repayment of the loan by the farmer or up to the due date of the loan fixed by the banks, whichever is earlier, subject to a maximum period of one year.
• The interest subvention benefit will be available to small and marginal farmers for a further period of up to six months post the harvest of the crop against negotiable warehouse receipts on the produce stored in warehouses accredited with Warehousing Development Regulatory Authority (WDRA).
• Relief will be provided to farmers from severe natural calamities, with the applicable rate of interest subvention for that year being made available to banks for the first three years/entire period (subject to a maximum of five years) on the restructured loan amount.
• Aadhaar linkage will continue to be mandatory for availing the short-term loans in 2022-23 and 2023-24.

Statistics:

• Interest rate for farmers availing short-term loans through KCC: 7%
• Additional interest subvention for timely repayment: 3%
• Effective interest rate for farmers who repay their loans promptly: 4%
• Maximum period for interest subvention benefit: one year from the date of disbursement
• Benefit to small and marginal farmers: up to six months post the harvest of the crop against negotiable warehouse receipts
• Number of years for relief from severe natural calamities: first three years/entire period (subject to a maximum of five years)
• Aadhaar linkage: mandatory for availing short-term loans in 2022-23 and 2023-24

Sources:

• Reserve Bank of India (RBI) notification
• Government of India, Interest Subvention Scheme (ISS) for FY 2022-23 and 2023-24
• Warehousing Development Regulatory Authority (WDRA) regulations
• National Executive Committee (NEC) recommendations
• Contify.com report