होम News Jharkhand Government’s New Initiative: Interest-Free KCC Loans for Farmers

Jharkhand Government’s New Initiative: Interest-Free KCC Loans for Farmers

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Jharkhand government has delivered a significant announcement for farmers. The government has introduced a new scheme for holders of Kisan Credit Cards (KCC). Under this scheme, farmers need to repay the outstanding loans on their Kisan Credit Cards. The government has set a deadline for this purpose. If KCC holders fulfill this requirement, they stand to benefit from this scheme.{Jharkhand Government’s }

In the state of Jharkhand, holders of Kisan Credit Cards (KCC) have received heartening news. The state government will now bear the entire interest cost on KCC loans, provided that farmers deposit their loan installments in the bank before March 31st.

According to information, KCC loans typically carry an interest rate of seven percent. Both the central and state governments subsidize three percent each of this interest cost.

However, it was observed that due to this one percent contribution, many farmers’ KCC loans were becoming non-performing assets (NPAs) for banks.

In light of this, the government has decided to cover the one percent interest cost as well, effectively reducing the farmers’ interest payment to just one percent. Consequently, the state government will now reimburse the four percent interest to the banks.

This decision comes after monitoring the challenging agricultural conditions in the state for the past two years.

Jharkhand has over 1.9 million Kisan Credit Card holders, with a significant increase observed in the last year due to government awareness campaigns. To avail of a KCC loan of up to 1.6 lakhs, farmers do not need to provide any special documentation to the banks.

The government’s objective is to encourage responsible use of KCC loans and prompt repayment by the farmers. A proposal for this purpose has been prepared and is awaiting approval from the Cabinet. Once approved, a sum of 250 crore rupees will be allocated for this initiative.

It’s noteworthy that the state has borrowed KCC loans totaling 10,000 crore rupees this year, which translates to an interest cost of 400 crore rupees.

However, it should be noted that 40 percent of KCC beneficiaries in the state default on their loans, meaning they do not deposit the loan amount in the bank as scheduled. In response to this situation, bankers had urged the government to find a solution, leading to the government’s decision to directly reimburse the interest amount to the banks.

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